DAT Q2-2019 MD&A - Dreambuilt rental community in Toronto’s West Don Lands neighbourhood (''West...

2019Q2

Management’s Discussion and Analysis 1

Condensed Consolidated Financial Statements 34

Notes to the Condensed Consolidated Financial Statements 39

Table of Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS(All dollar amounts in our tables are presented in thousands of Canadian dollars, except rental rates, unit, per unit and megawatt ("MW") amounts, unless otherwise stated)

Dream Hard Asset Alternatives Trust 2019 Second Quarter | 1

1. OVERVIEW AND OVERALL FINANCIAL PERFORMANCE

1.1 OVERVIEW OF THE TRUST

Dream Hard Asset Alternatives Trust ("Dream Alternatives" or the "Trust") is an open-ended trust focused on hard asset alternativeinvestments comprising real estate development and lending. In the Trust’s reportable operating segments, these investmentsare referred to as development and investment holdings, lending portfolio, and income properties. The Trust is managed byDream Asset Management Corporation ("DAM") or the "Asset Manager", a subsidiary of Dream Unlimited Corp. ("Dream") (TSX:DRM), which is one of Canada’s leading real estate companies, with approximately $15 billion of assets under management inNorth America and Europe. The Trust is listed on the Toronto Stock Exchange ("TSX") under the symbol "DRA.UN". On January 1,2018, Dream acquired control of the Trust, for accounting purposes, based on Dream's increased exposure to variable returnsresulting from increased ownership through units held in the Trust and from new real estate joint venture agreements. Dreamis the ultimate parent company of the Trust.

This Management's Discussion and Analysis ("MD&A") is dated as of, and reflects all material events up to August 7, 2019, thedate on which this MD&A was approved by the Board of Trustees. This MD&A should be read in conjunction with the auditedconsolidated financial statements and unaudited condensed consolidated financial statements, and the accompanying notes forthe year ended December 31, 2018 and, for the three and six months ended June 30, 2019, respectively, which have been preparedin accordance with International Financial Reporting Standards ("IFRS").

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

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

As at June 30, 2019, the Trust considered its renewable power segment to be a discontinued operation and the results arepresented separately from the Trust's ongoing operating activities. As at June 30, 2019, our operating segments consist of thefollowing:

• Development and investment holdings — participating mortgages receivable, and direct and indirect investments indevelopments and income-producing properties which included certain income-producing properties with re-development potential;

• Lending portfolio — interest-paying mortgages, mezzanine and corporate loans;• Income properties — a portfolio of office, industrial and commercial real estate properties in Canada.

1.2 OUR OBJECTIVES

Our objectives are to:• provide investors with access to an exceptional portfolio of real estate development opportunities and alternative assets

that would not be otherwise available in a public and fully transparent vehicle, managed by an experienced team witha successful track record in these areas;

• build and maintain a growth-oriented portfolio;• provide predictable cash distributions to unitholders on a tax efficient basis; and • grow and reposition the portfolio to increase cash flow, unitholders' equity and net asset value ("NAV") per unit(1) over

time.

(1) For the Trust's definition of the following non-IFRS measures: NAV, NAV per unit, and a reconciliation to total unitholders' equity, please refer to the Non-IFRS Measuresand Other Disclosures section of this MD&A.

1.3 PORTFOLIO SUMMARY

The table below provides a summary of the Trust's portfolio as at June 30, 2019, including total unitholders' equity and NAV. Withthe Trusts' focus on development investments that will generate higher growth and cash flow over a period of time, NAV per unitis considered to be a useful metric of value creation and unitholders' return. The determination of NAV incorporates a marketvalue(3) adjustment to equity accounted investments and the renewable power portfolio to take into consideration marketcomparables and a change in risk profile as a result of various factors including the progression of each project toward completionand/or reflecting information from recent market transactions that indicate a change in the investment value. For additionaldetails on NAV per unit, a non-IFRS measure, and a reconciliation to total unitholders' equity, please refer to the Reconciliationof Net Asset Value to Total Unitholders' Equity in the Financial Overview section of this MD&A.

Accountingtreatment(1) Assets Debt

Totalunitholders'

equity(2) NAV(3) NAV per

unitPercentage

of total NAV

Development and investment holdings, including equityaccounted investments

Fair value/ Equityaccounted $ 261,946 $ 256,562 $ 287,672 $ 3.99 46.0%

Lending portfolio Amortized cost(4) $ 145,292 $ 145,292 $ 145,292 $ 2.02 24.0%

Income properties Fair value $ 226,839 $ 121,778 $ 103,967 $ 103,967 $ 1.44 17.0%

Renewable power - discontinued operations Amortized cost $ 139,278 $ 71,592 $ 61,122 $ 71,372 $ 0.99 12.0%

Other(5)

Cash and consolidated working capital $ 13,277 $ 13,277 $ 0.19

Deferred income tax adjustment(6) (5,630) (0.08)

$ 13,277 $ 7,647 $ 0.11 1.0%

Total unitholders' equity / NAV $ 580,220 $ 615,950

Total unitholders' equity per unit(3) / NAV per unit $ 8.05 $ 8.55 100.0%(1) Equity accounted investments are recognized initially at cost and subsequently adjusted for the Trust's share of the profit or loss.(2) Total Unitholders' Equity includes working capital for each segment. Working capital is excluded from the Assets and Debt balances disclosed for each investment, as applicable. (3) For the Trust's definition of the non-IFRS measures NAV, market value and total unitholders' equity per unit, please refer to the Non-IFRS measure and Other Disclosures section ofthis MD&A.(4) As at June 30, 2019, the balance includes a loan of $17.5 million classified as fair value through profit and loss ("FVTPL").(5) Includes the Trust and other segment level cash and net working capital balances.(6) The deferred income tax adjustment is related to the equity accounted investments and renewable power market value adjustments.


1.4 FINANCIAL OVERVIEW - SECOND QUARTER 2019

For the three months ended June 30, 2019, the Trust reported net income of $8.8 million compared with $0.1 million in the sameperiod in the prior year. The increase was primarily driven by income contributions from its equity investment in AxisCondominiums, which commenced occupancy in the second quarter of 2019. In the six months ended June 30, 2019, the Trustgenerated net income of $9.6 million, an increase of $3.7 million from the prior period due to earnings from the above notedinvestment, partially offset by fair value gains on marketable securities which were earned in the comparative period.

UPDATES ON STRATEGIC PLAN TO ENHANCE UNITHOLDER VALUEThe Trust’s strategic plan, which was announced in early 2019, included the continued recycling of capital from the dispositionof select non-core assets into the Trust’s real estate developments, as well as a commitment to repurchase up to $100 million ofunits in three separate tranches in 2019 and 2020. Subsequent to the quarter ended June 30, 2019, the Trust announced itsintention to commence a substantial issuer bid ("SIB") pursuant to which the Trust will offer to purchase up to 4 million of itsoutstanding units at a purchase price of $8.00 per unit. The offer will expire on August 29, 2019 unless terminated or extendedby the Trust. The Trust intends to fund this first offer with a combination of cash on hand and its existing credit facility. As at June30, 2019, the Trust had a cash balance of $32.3 million and funds available under its revolving credit facility of $35.3 million.Subsequent to June 30, 2019, the revolving credit facility was renewed, and the maturity date was extended to July 31, 2021.

KEY ACHIEVEMENTS During the three and six months ended June 30, 2019, the Trust invested $8.8 million and $17.3 million including transactioncosts, respectively, into various development projects. Notable highlights for the Trust’s development investments are detailedbelow.

In the three months ended June 30, 2019, Zibi, a 34-acre waterfront development along the Ottawa River in Gatineau, Quebecand Ottawa, Ontario, announced the project’s first commercial lease with the Federal Government of Canada. The 15-year leaseis for approximately 155,000 square feet (''sf'') of office space located in the heart of the site, with unparalleled views to ParliamentHill. In addition to this building, there is over 450,000 sf of retail and commercial space in various planning/development stages.From a residential perspective, Zibi’s second condominium building is nearing completion with expected occupancies in early2020. Zibi also recently announced an innovative partnership with Common, a co-living residential company, to manage one ofthe project’s first rental buildings on the site. Along with the first phase of servicing for both the Ontario and Quebec lands, whichis progressing steadily, the site is transforming into an exceptional community in the heart of the National Capital Region. TheTrust has invested $43.2 million in Zibi to date, for an equity ownership of 40%.

During the three months ended June 30, 2019, the Trust reached an important financing milestone on the first block of its purpose-built rental community in Toronto’s West Don Lands neighbourhood (''West Don Lands''). Through CMHC’s Rental ConstructionFinancing initiative, the Federal Government announced the funding of $357 million (at 100%) for the first block slated fordevelopment ("Block 8"), which will comprise over 750 rental units including 30% affordable units. Construction is expected tocommence on Block 8 in the fall of 2019. The Trust has a 25% interest in the West Don Lands development, alongside Dream,Kilmer Van Nostrand Co. Limited and Tricon Capital Group as the residual partners.

During and subsequent to the second quarter of 2019, the Hard Rock/Virgin Hotels Las Vegas ("Hard Rock") investment enteredinto various partnerships with best-in-class operators. The Hard Rock signed an agreement with AEG Presents (''AEG''), anAmerican worldwide sporting and music presenter, to manage The Joint, its 4,000-seat showroom that can host classic andmodern rock bands as well as other types of events. AEG will manage, operate and book the venue beginning in the fall of 2020at which time the property will open as the re-conceptualized and revitalized Virgin Hotels Las Vegas. Additionally, during thesecond quarter of 2019, the Hard Rock entered into a lease agreement with a leading operator to manage its casino operations.This agreement is considered to be a significant milestone as it eliminates exposure to the underlying gaming operations providingthe hotel with a contractual triple net rental cash flow stream and allowing for a greater focus on driving value creation throughthe hospitality and Food & Beverage segments at the property. The Hard Rock continues to operate as an income producingproperty with the commencement of its revitalization slated for February 2020. As at June 30, 2019, the Trust's investment atthe Hard Rock had a fair value of $38.4 million for its 10% ownership interest which included an unrealized foreign currency lossof $0.8 million, for the three months ended June 30, 2019, and a cumulative unrealized foreign currency gain of $0.4 million sincethe inception of the investment.

Subsequent to June 30, 2019, an agreement was reached with the City of Mississauga to facilitate the advancement of municipalapprovals for our newly named Brightwater development (formerly referred to as “Port Credit”), which is a significant milestonefor the project. The partnership has collaborated extensively with the City, residents and community to reach this importantapproval stage. Brightwater is a 72-acre waterfront development which will encompass nearly 3,000 residential units and 400,000sf of commercial space upon completion. To date, remediation on the site has commenced and pending final approvals inSeptember, we anticipate construction to commence in 2020. The Trust, together with Dream, has a 31% investment in thedevelopment, with the remainder owned by Kilmer Van Nostrand Co. Limited, DiamondCorp, and FRAM + Slokker.

The Trust’s equity investment in Axis Condominiums generated net income of $10.3 million during the three months ended June30, 2019. This equity investment is a 572-unit project located at Church and Carlton Street in downtown Toronto.

RESULTS HIGHLIGHTS

DEVELOPMENT AND INVESTMENT HOLDINGS For the three months ended June 30, 2019, development and investment holdings generated net income of $6.5 million comparedwith a net loss of $4.8 million in the same period in the prior year. The increase relative to prior year was due to the aforementionedearnings from equity accounted investments.

LENDING PORTFOLIOFor the three months ended June 30, 2019, the lending portfolio generated net income of $3.7 million compared with $4.1 millionin the same period in the prior year. The decrease was due to a lower average loan balance in the current period. As at June 30,2019, the lending portfolio consisted of 9 loans aggregating to a total outstanding balance of $145.3 million with a weightedaverage effective interest rate of 9.7%.

INCOME PROPERTIESFor the three months ended June 30, 2019, income properties generated net income of $1.6 million compared with $2.6 millionin the same period in the prior year. The variance was primarily attributed to $1.1 million of income recorded in the prior periodrelated to marketable securities, which were disposed at the end of the second quarter of 2018.


DISCONTINUED OPERATIONS - RENEWABLE POWERFor the three months ended June 30, 2019, the renewable power portfolio generated net income of $4.6 million, an increase of$3.1 million relative to the prior year. The variance was primarily due to a deferred income tax recovery balance of $2.1 millionrecorded during the three months ended June 30, 2019, compared with a deferred income tax expense of $0.5 million in thesame period in the prior year, as well as favourable weather conditions. The deferred income tax recovery balance was primarilyrelated to temporary differences and the change in tax rate as a result of the renewable power segment being classified asdiscontinued operations. As part of the strategic plan to dispose of the Trust’s renewable power portfolio, the Trust commencedformal marketing of the segment in the period. Results were presented as discontinued operations in the three and six monthsended June 30, 2019.

OTHER(1)

The Other segment recorded a net loss of $7.5 million for the three months ended June 30, 2019 compared with a net loss of$3.2 million in the same period in the prior year. During the three months ended June 30, 2019, the Trust recorded a deferredincome tax expense of $3.3 million compared with a deferred income tax recovery of $1.0 million in the same period in the prioryear. The deferred income tax expense in the current period primarily related to income and capital gains realized on the dispositionof certain development and investment holdings assets.

UNITHOLDERS' EQUITYAs at June 30, 2019, total unitholders' equity of $8.05 per unit increased slightly compared to $8.04 per unit as at March 31,2019. The increase in total unitholders' equity was primarily due to net income generated of $8.8 million during the three monthsended June 30,2019, partially offset by unrealized foreign currency loss of $0.8 million and distributions paid and payable of $7.2million to unitholders.

NET ASSET VALUE ("NAV")The NAV per unit was $8.55 at June 30, 2019, compared with total unitholders' equity of $8.05 per unit. The variance was dueto a market value adjustment of $35.7 million (March 31, 2019 - $47.4 million) which was a result of market value gains relatedto the Trust's equity accounted investments and renewable power portfolio. During the three months ended June 30, 2019, themarket value adjustment decreased by $11.7 million from the prior quarter, primarily due to the Axis Condominiums projectrealizing income as it reached completion.

The Trust believes that incorporating a market value adjustment is a more useful measure to value development assets. Incalculating the market value adjustment, the Trust obtains independent third party appraisals at year end or as significantdevelopment milestones are achieved. As development projects progress toward completion and/or reflecting information fromrecent market transactions, we expect both unitholders equity and NAV to increase based on expected growth and cash flowsfrom these investments. The Trust relies on NAV per unit as a measure of value creation including the market value adjustmentson its equity accounted investments and renewable power projects. The closest IFRS measure to NAV per unit is unitholders'equity per unit. For further details regarding non-IFRS measures and a reconciliation, where applicable, to the condensedconsolidated financial statements, please refer to the Reconciliation of Net Asset Value to Total Unitholders' Equity in the FinancialOverview section of this MD&A.

CASH GENERATED FROM OPERATING ACTIVITIESCash generated from operating activities for the three months ended June 30, 2019 was $9.3 million compared with $1.7 millionin the same period in the prior year. The increase in cash generated from operating activities was primarily due to a cash advanceof $10.6 million related to the project completion of the above noted equity accounted investment.

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


FINANCIAL HIGHLIGHTS OF THE TRUST

Three months ended June 30, Six months ended June 30,2019 2018 2019 2018

Consolidated results of operationsNet income (loss) 8,839 115 9,553 5,899

Net income (loss) from continuing operations $ 4,246 $ (1,354) $ 4,420 $ 3,730Net operating income ("NOI")(1),(2) 16,710 6,879 22,672 13,336Cash generated from (utilized in) operating activities 9,331 1,681 14,225 5,230Net income (loss) per unit(1) 0.12 — 0.13 0.08Net income (loss) per unit from continuing operations 0.06 (0.02) 0.06 0.05Cash generated from (utilized in) operating activities per unit(1) 0.13 0.02 0.20 0.07

Trust unit informationDistributions declared and paid per unit 0.10 0.10 0.20 0.20Units outstanding – end of period 72,038,551 72,312,102 72,038,551 72,312,102Units outstanding – weighted average 71,895,547 72,483,275 71,789,168 72,432,739

(1) For the Trust's definition of the following non-IFRS measures: NOI, net income (loss) per unit, net income (loss) per unit from continuing operations, and cash generatedfrom (utilized in) operating activities per unit, please refer to the Non-IFRS Measures and Other Disclosures section of this MD&A.

(2) Excludes the renewable power-discontinued operations.

As atJune 30,

2019March 31,

2019December 31,

2018

Consolidated financial positionTotal Unitholders' Equity $ 580,220 $ 580,291 $ 590,258Total Unitholders' Equity per unit 8.05 8.04 8.13NAV⁽¹⁾ 615,950 627,657 634,650NAV per unit 8.55 8.71 8.74Total contractual debt payable⁽²⁾ 122,138 198,069 198,654Total assets 823,736 815,821 813,307Cash 32,272 33,525 46,730Debt-to-gross asset value⁽²⁾ 18.1% 24.3% 24.4%

(1) For details on NAV and a reconciliation to total unitholders' equity, please refer to the Reconciliation of Net Asset Value to Total Unitholders' Equity in the FinancialOverview section of this MD&A.

(2) For the Trust's definition of the following non-IFRS measures: debt-to-gross asset value, gross asset value and total contractual debt payable, please refer to the Non-IFRS Measures and Other Disclosures section of this MD&A.

NET INCOME (LOSS) BY OPERATING SEGMENTS


Development and investment holdings $ 6,456 $ (4,824) $ 6,007 $ (2,680)Lending portfolio 3,722 4,102 7,255 7,778Income properties 1,578 2,591 3,109 5,773Other⁽¹⁾ (7,510) (3,223) (11,951) (7,141)Total $ 4,246 $ (1,354) $ 4,420 $ 3,730



RECONCILIATION OF NET ASSET VALUE TO TOTAL UNITHOLDERS' EQUITY

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

As at June 30, 2019

Developmentand

investmentholdings

Lendingportfolio

Incomeproperties

Renewablepower-

discontinuedoperations Other(1) Total

TOTAL UNITHOLDERS' EQUITY(2) $ 256,562 $ 145,292 $ 103,967 $ 61,122 $ 13,277 $ 580,220Market value adjustment to equity accounted investments(3) 31,110 — — — — 31,110Market value adjustment to renewable power assets(4) — — — 10,250 — 10,250Deferred income taxes adjustment — — — — (5,630) (5,630)NAV $ 287,672 $ 145,292 $ 103,967 $ 71,372 $ 7,647 $ 615,950

NAV PER UNIT $ 3.99 $ 2.02 $ 1.44 $ 0.99 $ 0.11 $ 8.55(1) Other includes Trust and segment level cash and net working capital balances.(2) Total unitholders' equity includes working capital balances as allocated to each respective segment.(3) For additional details on the Trust's equity accounted investments market value adjustment, please refer to Equity Investments Market Value Adjustments Included in

NAV - Methodology within section 2.1 of the MD&A.(4) For additional details on the Trust's renewable power assets market value adjustment, please refer to Renewable Power Market Value Adjustment Included in NAV -

Methodology with section 2.4 of the MD&A.

As at March 31, 2019

Developmentand

investmentholdings

Lendingportfolio

Incomeproperties

Renewablepower-




NAV - Methodology within section 2.1 of the MD&A.(4) For additional details on the Trust's renewable power assets market value adjustment, please refer to Renewable Power Market Value Adjustment Included in NAV -


As at December 31, 2018

Developmentand

investmentholdings

Lendingportfolio

Incomeproperties

Renewablepower-




NAV - Methodology within section 2.1 of the MD&A.(4) For additional details on the Trust's renewable power assets market value adjustment, please refer to Renewable Power Market Value Adjustment Included in NAV



1.5 HIGHLIGHTS BY REPORTABLE OPERATING SEGMENTS

The charts and tables below summarize our consolidated net assets attributable to unitholders of the Trust(1) as at June 30, 2019by operating segment and geographic allocation, excluding cash and other Trusts' consolidated working capital, including tax.

OPERATING SEGMENT ALLOCATION

(1) For the Trust's definition of net assets attributable to unitholders of the Trust, please refer to the Non-IFRS Measures and Other Disclosures section of this MD&A. (2) As at June 30, 2019, this segment includes under development and completed investments of 40.3% (December 31, 2018 - 36.7%) and income-producing investments

of 10.4% (December 31, 2018 - 13.8%).

GEOGRAPHIC ALLOCATION

As atJune 30,

2019⁽¹⁾December 31,

2018⁽¹⁾

Toronto and Greater Toronto Area ("GTA") 68.7% 66.9%Other Ontario 11.8% 10.6%British Columbia 8.5% 8.2%United States 7.6% 8.0%Saskatchewan 3.4% 3.5%Other Western Canada —% 2.8%Total 100.0% 100.0%

(1) Excludes renewable power segment.


2. REPORTABLE OPERATING SEGMENTS RESULTS OF OPERATIONS


2.1 DEVELOPMENT AND INVESTMENT HOLDINGS, INCLUDING EQUITY ACCOUNTEDINVESTMENTS

As at June 30, 2019, our development and investment holdings, including equity accounted investments, consisted ofapproximately $261.9 million (December 31, 2018 - $251.1 million) of net assets. For the six months ended June 30, 2019, theincrease in development and investment holdings was primarily related to the Trust investing $17.3 million of capital into itsvarious development projects, including transaction costs. The following represents the Trust's net assets which include thefollowing investments:

Asset value At 100% project-level

Investment SectorAccountingtreatment Status

Economicinterest(1) %

Expectedcompletion(2)

June 30, 2019

December 31,2018

% sold orleased /

occupied

Units (#) orsq. ft.(000s)

Investment holdings

Bayfield Retail Fair value Income producing 13.2% N/A $ 276 $ 13,879 81.3% 279 sq.ft.

Hard Rock/VirginHotels Las Vegas(3)

Hospitality Fair value Income producing 10.0% 2020 38,355 39,965 88.1% 1,504 keys

Total investment holdings $ 38,631 $ 53,844

Development holdings

Empire Brampton Residential Fair value Substantiallycompleted

78.8% Q3 2017⁽⁴⁾ $ 2,534 $ 3,430 100.0% 685 units

Empire Lakeshore Residential Fair value Construction 80.0% Q3 2019 - Q12020

64,085 61,335 99.3% 1,280 units

Total development holdings $ 66,619 $ 64,765

Total development and investment holdings $ 105,250 $ 118,609

Total equity accounted investments $ 156,696 $ 132,528

Total development and investment holdings, including equity accounted investments $ 261,946 $ 251,137

Market value adjustments to equity accounted investments included in NAV(5) $ 31,110 $ 39,870

NAV per unit $ 3.99 $ 4.06(1) Represents debt and equity interests in the underlying projects.(2) The final completion dates are estimated by the Asset Manager based on information provided by the development project manager regarding the expected completion

dates and development status as at June 30, 2019 and are subject to change. (3) % occupied based on a year to date average for the period ended June 30, 2019. (4) The Empire Brampton low-rise project was considered substantially complete during the third quarter of 2017. The amount outstanding represents customary cash hold

backs expected to be received by the Trust over the next two years, as such the balance is expected to continually decline. (5) For additional details on the Trust's market value adjustments to equity accounted investments, please refer to Equity Investments Market Value Adjustments Included

in NAV - Methodology within section 2.1 of this MD&A.

A summary of the development and investment holdings results, including equity accounted investments, are below:


Net income-development holdings and equity accounted investments $ 10,442 $ (5,659) $ 10,635 $ (3,685)

Net income-investment holdings (3,986) 835 (4,628) 1,005Total net income $ 6,456 $ (4,824) $ 6,007 $ (2,680)

For the three and six months ended June 30, 2019, development and investment holdings generated net income of $6.5 millionand $6.0 million, respectively, compared with a net loss of $4.8 million and $2.7 million in the same periods in the prior year.

The year over year variance was primarily related to income of $10.3 million generated from the Trust's equity accountedinvestment in Axis Condominiums compared with fair value losses recognized in the comparative periods. Axis Condominiumsis a 572-unit project located at Church and Carlton Street which commenced occupancy in the three months ended June 30,2019. The overall project return has generated an IRR in excess of 50%. Results are not directly comparable to the prior periodas there were no projects in occupancy in the same period in the prior year. In addition, during the three and six months endedJune 30, 2019, the Trust recorded a fair value loss of $3.3 million related to the disposal of the Trust's non-core legacy BayfieldLP investment and an unrealized foreign currency loss of $0.8 million and $1.6 million, respectively, related to its investment inHard Rock.

DEVELOPMENT HOLDINGS, INCLUDING EQUITY ACCOUNTED INVESTMENTS

The tables below provide a continuity of the development holdings balance, including equity accounted investments, for theperiods indicated:

For the three months ended June 30, 2019Empire

BramptonEmpire

Lakeshore Subtotal

Equityaccounted

investments Total

Balance as at March 31, 2019 $ 2,492 $ 61,335 $ 63,827 $ 140,834 $ 204,661Advances/investments/share of income — 2,750 2,750 15,862 18,612Fair value adjustments 42 — 42 — 42Balance as at June 30, 2019 $ 2,534 $ 64,085 $ 66,619 $ 156,696 $ 223,315

For the six months ended June 30, 2019Empire

BramptonEmpire

Lakeshore Subtotal

Equityaccounted

investments Total

Balance as at December 31, 2018 $ 3,430 $ 61,335 $ 64,765 $ 132,528 $ 197,293Advances/investments/share of income — 2,750 2,750 24,168 26,918Distribution/capital repayment (1,238) — (1,238) — (1,238)Fair value adjustments 342 — 342 — 342Balance as at June 30, 2019 $ 2,534 $ 64,085 $ 66,619 $ 156,696 $ 223,315

DEVELOPMENT HOLDINGS During the three and six months ended June 30, 2019, the Trust contributed an additional $2.8 million to the Empire Lakeshoredevelopment. As at June 30, 2019, occupancy had commenced on both the Water and Sky Tower with 27.0% of the units occupied.

During the three and six months ended June 30, 2019, the Trust received $1.2 million of cash proceeds from the Empire Bramptondevelopment, which was considered profit to the Trust in excess of its initial contribution. The timing of the remaining $2.8 millionin cash distributions on the project is expected to be released over the next two years. As at June 30, 2019, the Trust has received$30.3 million from the Empire Brampton project, of which $11.4 million represented profit to the Trust in excess of its initialcontribution.

As at June 30, 2019, approximately $85.8 million of the Trust’s total assets were advanced to Empire-related development projectsor debt representing approximately 10.4% of the Trust's total assets, excluding the Trust's financial guarantee associated withEmpire Lakeshore which is discussed in Note 23 of the condensed consolidated financial statements.


EQUITY ACCOUNTED INVESTMENTSThe Trust participates in various partnerships with other parties for the purpose of investing in residential and mixed-usedevelopment projects which are accounted for using the equity accounted investment method. As at June 30, 2019, the carryingvalue of these arrangements was $156.7 million (December 31, 2018 - $132.5 million).

During the three and six months ended June 30, 2019, the Axis Condominiums project was completed, which resulted in $10.3million of income recorded at the Trust's share and a cash advance of $10.6 million.

During the six months ended June 30, 2019, the Trust, along with DAM, increased its interest in its retail shopping centre andresidential mixed-use development investment opportunity located at 100 Steeles Ave. West in Toronto, Ontario ("100 Steeles")to 50%. The Trust invested $2.2 million for an additional interest in the investment resulting in the Trust increasing its ownershipto 37.5% in 100 Steeles, with DAM owning the remaining 12.5%.

During the six months ended June 30, 2019, the Trust, along with DAM, acquired the remaining 50% of an existing equitypartnership formed for the development of a residential property located in downtown Toronto, Ontario. The Trust, along withDAM, invested $4.5 million for the additional 50% in the development investment resulting in the Trust owning a 75% interestand DAM owning the remaining 25%. The project is managed by DAM.

Development projects are key drivers of future growth for the Trust and are expected to generate attractive returns and futurecash flows as milestones are achieved. The Trust expects its development projects will provide attractive profits to the Trust upontheir respective completion dates and will contribute to increased value for unitholders over the longer term. The Trust generallytargets a pre-tax IRR of at least 15-20% on new equity investments in residential and mixed-use development projects.

EQUITY INVESTMENTS MARKET VALUE ADJUSTMENT INCLUDED IN NAV - METHODOLOGYAs part of its NAV calculation, a non-IFRS measure, the Trust recognized cumulative market value gains of $31.1 million relatedto equity accounted investments as at June 30, 2019 (March 31, 2019 - $41.2 million; December 31, 2018 - $39.9 million). Duringthe three months ended June 30, 2019, the market value adjustment related to development and investment holdings decreasedby $10.1 million from the prior quarter primarily due to the Axis Condominiums project realizing income as it reached completion.During and subsequent to the three months ended June 30, 2019, the Trust received a cash advance of $13.4 million. The marketvalue adjustment is considered an important element that the Trust has included in its NAV calculation to address the change inrisk profile taking into consideration various factors including the progression of each project toward completion and/or reflectinginformation from recent market transactions that indicate a change in the investment value. Under IFRS and in the Trust’scondensed consolidated financial statements these development investments are equity accounted, which are initially recognizedat cost and subsequently include the Trust's share of profit or loss. The Trust believes that incorporating a market value adjustmentis a more useful measure to value these development assets that would not ordinarily be captured within IFRS and the Trust'scondensed consolidated financial statements. In calculating the market value adjustment on the equity accounted developmentinvestments the Trust obtains independent third party appraisals annually or as significant development milestones are achieved.For those projects in active development or construction, the Trust uses the discounted cash flow methodology in determiningthe market value adjustment on a quarterly basis. The discounted cash flow model utilizes various assumptions including, butnot limited to: the risk and timing of expected cash flows, and the successful completion of the projects on time and on budget.Assuming consistent market conditions, the development projects are expected to continue to generate market value increasesas they continue to advance closer to their completion dates.

INVESTMENT HOLDINGSThe tables below provide a continuity of the investment holdings balance for the periods indicated:

For the three months ended June 30, 2019Bayfield Retailand Mill Wood

Hard Rock/Virgin Hotels

Las Vegas Total

Balance as at March 31, 2019 $ 13,879 $ 39,156 $ 53,035Distribution/capital repayment (10,307) — (10,307)Fair value adjustments (3,296) (801) (4,097)Balance as at June 30, 2019 $ 276 $ 38,355 $ 38,631


For the six months ended June 30, 2019Bayfield Retailand Mill Wood

Hard Rock/Virgin Hotels

Las Vegas Total

Balance as at December 31, 2018 $ 13,879 $ 39,965 $ 53,844Distribution/capital repayment (10,307) — (10,307)Fair value adjustments (3,296) (1,610) (4,906)Balance as at June 30, 2019 $ 276 $ 38,355 $ 38,631

During the three and six months ended June 30, 2019, the Trust sold components of its non-core legacy Bayfield LP investmentfor cash proceeds of $10.3 million, recognizing a fair value loss of $3.3 million upon disposition.

During the three and six months ended June 30, 2019, the Trust recorded an unrealized foreign currency loss of $0.8 million and$1.6 million, respectively, related to the Hard Rock Hotel & Casino, resulting in a cumulative unrealized foreign currency gain of$0.4 million since inception of the investments.


2.2 LENDING PORTFOLIO

The Trust invests in mortgages and loans secured by all types of residential and commercial real estate property that representan acceptable underwriting risk. Working within these risk parameters, the Trust also invests in higher-yielding developmentand construction loans, bridge loans and mezzanine loans, where we are comfortable with the underlying security, guaranteesand covenants of the borrower.

A summary of the lending portfolio segment results follows:


Net income $ 3,722 $ 4,102 $ 7,255 $ 7,778

As atJune 30,

2019December 31,

2018

Number of loans outstanding 9 10Lending portfolio balance at amortized cost⁽¹⁾ $ 145,292 $ 144,095NAV 145,292 142,220NAV per unit 2.02 1.96Security allocation (1st mortgages/other) 71.3% / 28.7% 69.8% / 30.2%Weighted average effective interest rate (period-end) 9.7% 9.6%Weighted average face interest rate (period-end) 8.7% 8.8%Weighted average remaining term to maturity (period-end) (years) 0.93 1.28

(1) Lending portfolio balance included a loan of $17.5 million (December 31, 2018 - $16.6 million) that is classified as FVTPL.

During the three and six months ended June 30, 2019, net income of $3.7 million and $7.3 million, respectively, was generatedfrom the lending portfolio, a decrease of $0.4 million and $0.5 million, respectively, relative to the same periods in the prioryear. The decrease was primarily attributable to a lower average loan balance period over period.

The table below provides a continuity of the lending portfolio balance for the periods indicated:

For the periods ended June 30, 2019For the three months

endedFor the six months

endedBalance, beginning of period $ 142,748 $ 144,095Add (deduct): Lending portfolio advances 59 59 Changes in accrued interest balance 376 464 Interest capitalized to lending portfolio balance 1,813 3,586

Discount on lending portfolio, net of amortization 184 363 Lender fees and extension fees received, net of amortization 112 225

Principal repayments at maturity and contractual repayments and prepayments — (3,500)Balance, end of period $ 145,292 $ 145,292

We continue to leverage our relationships and expertise to identify opportunities with attractive yields to balance the returnswithin the lending portfolio and our future expected capital requirements on our development projects. The Asset Manageractively manages the lending portfolio and may decide to renew and extend loans, including those with a maturity date of 12months from the balance sheet date, in the normal course of business.

Development loans have historically provided very attractive returns. We believe that we benefit from the Asset Manager'sposition as an active developer, such that our risk associated with originating development loans is reduced to a certain extent.As a result, the Trust's exposure to residential development and land loans located within the Vancouver area and the GTA hasincreased since inception. We believe that real estate lending continues to be valuable by providing a base return while alsosupporting the overall liquidity objectives of the Trust.


2.3 INCOME PROPERTIES

Revenue from income properties includes base rents, operating expenses and property tax recoveries, lease termination fees,parking income and ancillary income. Revenue recognition under a lease commences when the tenant has a right to use theleased asset. The total amount of contractual rent to be received from operating leases is recognized on a straight-line basis overthe term of the lease; a straight-line rent receivable is recorded for the difference between the rental revenue recognized andthe contractual amount received. Recoveries from tenants are recognized as revenues in the period that the corresponding costsare incurred and collectability is reasonably assured. Other revenues are recorded as earned.

As at June 30, 2019, the Trust's total income properties comprise two office properties co-owned with Dream Office REIT (TSX:D.UN), three wholly owned properties and six industrial real estate properties co-owned with Dream Industrial REIT (TSX: DIR.UN).

A summary of income property segment results is included in the table below:

As atJune 30,

2019December 31,

2018

NAV $ 103,967 $ 101,962NAV per unit 1.44 1.40Income properties at IFRS fair value 226,839 224,310Amortized balance of mortgages payable 121,778 122,214Debt-to-gross asset value⁽¹⁾ (income properties) 51.5% 52.2%

(1) For the Trust's definition of the non-IFRS measure of debt-to-gross asset value and gross asset value, please refer to the Non-IFRS Measures and Other Disclosuressection of this MD&A.


Income properties revenue $ 5,858 $ 5,779 $ 11,882 $ 11,641NOI 2,811 2,710 5,514 5,428Net income⁽¹⁾ 1,578 1,549 3,109 1,012

Core income properties⁽²⁾Income properties revenue $ 4,261 $ 4,177 $ 8,610 $ 8,373NOI 2,167 2,125 4,225 4,130Net income 1,155 1,605 2,315 1,483

(1) Net income (loss) for the three and six months ended June 30, 2018 excludes a fair value adjustment to the Trusts' investment in Dream Office REIT units of $0.7 millionand $3.7 million and dividend income of $0.4 million and $1.1 million, respectively.

(2) Core income properties are those that the Trust plans to hold for the long term and non-core income properties are considered non-strategic to management's long-term business plan.

During the three months ended June 30, 2019, the Trust recorded net income of $1.6 million which was relatively consistent withthe same period in the prior year. During the six months ended June 30, 2019, income properties recorded net income of $3.1million compared with $1.0 million in the same period in the prior year. The year over year variance was due to fair value lossesrecorded in the prior periods compared with a fair value gain in the current period related to changes in lease assumptions.

Operating statistics for core income properties portfolio are as follows:

As atJune 30,

2019December 31,

2018June 30,

2018

Total core income properties portfolioNumber of properties 10 10 10Owned GLA (in millions of sf) 0.6 0.6 0.6Occupancy rate (period-end) — including committed 91.7% 88.9% 91.9%Occupancy rate (period-end) — in-place 86.7% 88.0% 87.0%Average tenant size (in sf) 8,977 9,865 9,521Average in-place and committed base rent per sf (period-end) 16.94 16.98 16.62Weighted average remaining lease term (years) 5.2 5.2 5.4

As at June 30, 2019, the committed occupancy rate for the core income properties was 91.7% up from 88.9% as at December31, 2018, primarily due to negotiating new lease arrangements on certain core income properties. The weighted average remaininglease term remained relatively consistent at 5.2 years at June 30, 2019, compared to December 31, 2018.

INCOME PROPERTIES FAIR VALUES AND CONTINUITYThe table below provides a continuity of the income properties balance for the period indicated:

For the sixmonths endedJune 30, 2019

For the yearended

December 31,2018

Balance, beginning of period $ 224,310 $ 219,656Add (deduct):

Building improvements – recoverable 2,074 1,204Building improvements – non-recoverable — 46Lease incentives and initial direct leasing costs 960 6,859Amortization of lease incentives (766) (1,260)Fair value adjustments to income properties 261 (2,195)

Balance, end of period $ 226,839 $ 224,310

During the six months ended June 30, 2019, the Trust recorded a fair value gain of $0.3 million to its income properties relatedto changes in leasing assumptions, compared with $2.2 million of fair value losses recorded in the same period in the prior year.Income properties, excluding assets held for sale (''AHFS'') and certain properties where binding bids are received, are measuredat fair value using the income approach, which is derived from the overall capitalization rate method or discounted cash flowmethod. The Trust determines the fair value of income properties classified as AHFS by considering the current contracted saleprices, as management has committed to a plan of sale of the underlying properties and the sale of the properties is consideredhighly probable. The fair values of income properties at June 30, 2019 were determined by using capitalization rates ("cap rates")of 4.3% to 7.5% (December 31, 2018 – 4.3% to 7.5%), resulting in a weighted average cap rate of 5.9% (December 31, 2018 –5.9%) and discount rates of 5.8% to 8.8% (December 31, 2018 – 5.8% to 8.8%).


2.4 RENEWABLE POWER - DISCONTINUED OPERATIONS

Our renewable power segment includes a solar rooftop portfolio, a solar ground-mount portfolio and two wind power portfolios.All projects within these portfolios have an initial 20-year term with government or regulated utility power purchase agreements("PPA"), allowing the sale of generated electricity at a fixed contract rate above the market rate, resulting in stable and predictablerates for all electricity generated. The operating results of the renewable power segment are subject to seasonal variations. Windproduction typically is best in the winter months while solar production tends to generate higher output in the summer months.Weather and seasonal related quarter to quarter fluctuations may occur from time to time although the annual level of incomeis stable in nature. During the three months ended June 30, 2019, the Trust publicly announced the decision to dispose of itsrenewable power operating segment, which is expected to be completed within a year from the reporting date. As at June 30,2019, the assets and liabilities of the renewable power segment were classified as assets held for sale and its operations werepresented as discontinued operations.

A summary of the renewable power - discontinued operations results is as follows:


Total income - discontinued operations $ 4,930 $ 5,405 $ 9,252 $ 9,669Net Income (loss) - discontinued operations 4,593 1,469 5,133 2,169

As atJune 30,

2019December 31,

2018

Renewable power assets $ — $ 130,615NAV - discontinued operations 71,372 74,711NAV per unit - discontinued operations 0.99 1.03Installed capacity (operational) (MW)⁽¹⁾⁽²⁾ 22.4 22.4

(1) Installed capacity (MW) is the maximum amount of electrical power in megawatts that the renewable power projects held by the Trust are capable of generating.(2) Prorated based on the Trust's ownership percentage or economic interest.

For the three and six months ended June 30, 2019, net income from discontinued operations of $4.6 million and $5.1 million,respectively, increased compared to $1.5 million and $2.2 million, respectively, in the same periods in the prior year. The variancewas primarily due to a deferred income tax recovery balance of $2.1 million recorded during the three months ended June 30,2019 compared to a deferred income tax expense of $0.5 million in the same period in the prior year. The deferred income taxrecovery balance was primarily related to temporary differences and the change in tax rate as a result of the renewable powersegment being classified as discontinued operations. As part of the strategic plan to dispose of the Trust’s renewable powerportfolio, the Trust commenced formal marketing of the segment in the period. Results were presented as discontinued operationsin the three months ended June 30, 2019. Upon classification as a discontinued operation, the Trust ceased to recognizedepreciation on the renewable segment’s non-current assets.

The tables below provide a continuity of the discontinued operations -renewable power asset balance for the periods indicated:

For the three months ended June 30, 2019 Right-of-use Solar power Wind power TotalBalance as at March 31, 2019 $ 11,888 $ 79,269 $ 49,807 $ 140,964Additions (dispositions) to renewable power assets during the period — (41) — (41)Depreciation (55) (304) (222) (581)Foreign currency loss (252) — (812) (1,064)Transfers to assets held for sale (11,581) (78,924) (48,773) (139,278)Balance as at June 30, 2019 $ — $ — $ — $ —

For the six months ended June 30, 2019 Right-of-use Solar power Wind power TotalBalance as at December 31, 2018 $ — $ 80,163 $ 50,452 $ 130,615Right-of-use asset recognized on the adoption of IFRS 16 12,036 — — 12,036Additions (dispositions) to renewable power assets during the period — (41) — (41)Depreciation (236) (1,198) (844) (2,278)Foreign currency loss (219) — (835) (1,054)Transfers to assets held for sale (11,581) (78,924) (48,773) (139,278)Balance as at June 30, 2019 $ — $ — $ — $ —


Effective January 1, 2019, the Trust applied IFRS 16 "Leases" ("IFRS 16"), a single accounting model for most leases that requiresa lessee to recognize right-of-use assets and lease liabilities for leases. Upon adoption of IFRS 16, the Trust recognized a right-of-use asset in the amount of $12.0 million with a corresponding lease liability related to various land and rooftop leases in thecondensed consolidated statement of financial position as at January 1, 2019. The right-of-use asset is depreciated over theshorter of the asset's useful life and the lease term on a straight-line basis. As noted above, as a result of its presentation asdiscontinued operations there is no further depreciation recorded related to these non-current assets.

RENEWABLE POWER MARKET VALUE ADJUSTMENT INCLUDED IN NAV - METHODOLOGYThe Trust records its renewable power wind and solar assets at cost less accumulated depreciation and impairment charges, ifany, within its condensed consolidated financial statements. In determining NAV, a non-IFRS measure, the Trust reflects a marketvalue adjustment, which takes into consideration any reduction in the risk profile of the renewable power projects developed bythe Trust once they become operational and long-term financing is arranged. The market value adjustment also reflects recentmarket information that would indicate a change in the renewable power portfolio market value (subject to appraisals). The Trustbelieves that incorporating a market value adjustment is a more useful measure to value the renewable power portfolio thatwould not ordinarily be captured within IFRS and the Trust's condensed consolidated financial statements.

The Trust intends to obtain independent third party appraisals annually or as significant events impacting the renewable portfoliohave occurred or been achieved. Internal revaluations are made on a quarterly basis to reflect up to date inputs and the remainingPPA term. The market value for each operational renewable power project is determined using a discounted cash flow model.The model incorporates assumptions, which include future cash flows from in-place PPAs, estimates of anticipated long-termaverage electricity generation, and estimated operating and capital expenditures.

During the three months ended June 30, 2019, a market value loss of $0.1 million was recognized on the renewable powerportfolio NAV. The market loss was due to the amortization of the renewable portfolio, stemming from the market value gainthat is amortized over the term of the PPA. As at June 30, 2019, the Trust recorded a total cumulative $10.3 million market valuegain to the renewable power portfolio (March 31, 2019 - $10.4 million; December 31, 2018 - $10.5 million). The cumulativemarket value gain, as at June 30, 2019, was primarily attributable to yield compression.

RENEWABLE POWER PROJECTS

Below is a summary of our renewable power projects:

Number ofprojects

Economicinterest

Installedcapacity(MW)⁽¹⁾

Weightedaverage

remainingPPA

(years)Commercial

operational date⁽²⁾

Operational projectsOntario Rooftop Solar 10 100% 3.2 15.5 Q2 2014 – Q3 2015United Kingdom Wind 46 100% 3.8 15.3 Q2 2013 – Q3 2016Nova Scotia Wind 3 80% 10.6 16.3 Q4 2015Ontario Ground Mount Solar 10 100% 4.8 17.1 Q4 2015 - Q4 2016Total as at June 30, 2019 22.4 16.2Total as at December 31, 2018 22.4 16.6

(1) Prorated based on the Trust's ownership percentage or economic interest.(2) Commercial operational date is based on the commencement of the PPA agreement.


2.5 CONSOLIDATED TRUST REVIEW OF TOTAL COMPREHENSIVE INCOME (LOSS)

The table below presents summarized condensed consolidated statements of comprehensive income (loss) for the periodsindicated:


TOTAL INCOME $ 15,703 $ 4,791 $ 24,476 $ 16,146TOTAL EXPENSES (8,457) (8,408) (17,253) (16,480)Fair value adjustments to income properties 261 (114) 261 (2,224)OPERATING INCOME (LOSS) 7,507 (3,731) 7,484 (2,558)Interest and other income 446 857 1,086 2,092Transaction costs (445) (60) (430) (137)Fair value adjustments to marketable securities — 615 — 3,366EARNINGS (LOSS) BEFORE INCOME TAX RECOVERY (EXPENSE) 7,508 (2,319) 8,140 2,763

INCOME TAX RECOVERY (EXPENSE)Current income tax recovery (expense) — — — —Deferred income tax recovery (expense) (3,262) 965 (3,720) 967TOTAL INCOME TAX RECOVERY (EXPENSE) (3,262) 965 (3,720) 967

NET INCOME (LOSS) FROM CONTINUING OPERATIONS 4,246 (1,354) 4,420 3,730

Income (loss) from discontinued operations before tax 2,542 1,965 3,298 2,851Income tax recovery (expense) from discontinued operations - current (3) (4) (4) (4)Income tax recovery (expense) from discontinued operations - deferred 2,054 (492) 1,839 (678)NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS 4,593 1,469 5,133 2,169

NET INCOME (LOSS) 8,839 115 9,553 5,899

OTHER COMPREHENSIVE INCOME (LOSS)Realized fair value loss in available-for-sale investments, net of tax 23 24 53 50Other comprehensive income (loss) from discontinued operations (788) (794) (806) 419TOTAL COMPREHENSIVE INCOME (LOSS) $ 8,074 $ (655) $ 8,800 $ 6,368

TOTAL INCOME FROM CONTINUING OPERATIONSTotal income for the three and six months ended June 30, 2019 of $15.7 million and $24.5 million, respectively, increased by$10.9 million and $8.3 million, respectively, when compared with the same periods in the prior year. The increase was primarilyattributable to the commencement of occupancy at Axis Condominiums with the Trust recording its share of income of $10.3million during the three and six months ended June 30, 2019, with no similar income recorded in the comparative periods.

TOTAL EXPENSES During the three months ended June 30, 2019, total expenses of $8.5 million remained relatively consistent compared with thesame period in the prior year. During the six months ended June 30, 2019, total expenses of $17.3 million increased by $0.8million compared with the same period in the prior year. This increase was primarily due to deferred compensation expense of$1.2 million as a result of a 23% increase in the Trust unit price period over period, an increase of $0.5 million compared to thesame period in the prior year.

FAIR VALUE ADJUSTMENTS TO INCOME PROPERTIESDuring the three and six months ended June 30, 2019, the Trust recorded $0.3 million in fair value gains related to changes inleasing assumptions compared with net fair value losses of $0.1 million and $2.2 million recorded in the same periods in the prioryear.

FAIR VALUE ADJUSTMENT TO MARKETABLE SECURITIESDuring the three and six months ended June 30, 2019, the Trust did not record any fair value adjustments in marketable securitiescompared with gains of $0.6 million and $3.4 million in the same periods in the prior year, respectively, as all marketable securitieswere disposed at the end of the second quarter of 2018.


TRANSACTION COSTSTransaction costs during the three and six months ended June 30, 2019, were $0.4 million compared with $0.1 million in thesame periods in the prior year. The year over year variance was mainly due to non-recurring transactions costs incurred in thecurrent period.

INCOME TAX EXPENSE (RECOVERY)For the three and six months ended June 30, 2019, income tax expense was $3.3 million and $3.7 million compared to an incometax recovery of $1.0 million and $1.0 million for the same periods in the prior year as a result of an increase in deferred taxexpenses. The higher deferred income tax expense primarily related to income and capital gains realized on the disposition ofcertain development and investment holding assets.

Due to the Trust’s diversified asset mix and active asset management strategy, we expect some degree of variability in currentand deferred income tax expense recognized each quarter through the condensed consolidated statement of comprehensiveincome (loss) resulting in an income tax expense (recovery) position. The Trust intends to actively manage the portfolio in a taxefficient manner.

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

TAX ATTRIBUTES INCOME PROPERTIESWe deduct mortgage interest and available tax depreciation on our buildings from our Canadian income properties that generatetaxable net operating income. These deductions contribute to the overall tax efficiency of our structure and, in particular, thetax depreciation helps provide the Trust with tax-sheltered cash flow. Any change in the fair value of income properties is notrecognized in the determination of current taxes until the sale of the asset.

RENEWABLE POWERThe Income Tax Act (Canada) makes available "green" energy tax incentives to the renewable energy sector. Certain pre-development and soft costs that are not normally deductible, known as Canadian renewable and conservation expenses ("CRCE"),are deductible against other sources of income in the year they are incurred. Non-CRCE project costs that are not otherwisecurrently deductible are included in the cost of the depreciable property and are eligible for maximum tax depreciation ratesbetween 30% and 50%, which can be used to help offset income for approximately eight to 12 years once the project becomesoperational.

OTHER COMPREHENSIVE INCOME (LOSS) FROM DISCONTINUED OPERATIONSDuring the three months ended June 30, 2019, the Trust recorded other comprehensive loss from discontinued operations of$0.8 million which was consistent with the prior period due to comparable foreign exchange rates.

During the six months ended June 30, 2019, other comprehensive loss from discontinued operations of $0.8 million comparedwith a gain of $0.4 million in the same period in the prior year. The variance was largely due to the fluctuation in the British poundrelative to the Canadian dollar period over period.


2.6 RELATED PARTY TRANSACTIONS

The Trust and its subsidiaries enter into transactions with related parties that are disclosed in Note 21 of the condensedconsolidated financial statements.

3. DISTRIBUTION MEASURES

In any given period, the Trust anticipates that actual distributions paid and payable may differ from cash generated from operatingactivities. This difference is driven by a number of factors including the impact of leasing incentives and initial direct leasing costswhich can fluctuate with lease maturities, renewal terms and the type of asset being leased; changes in non-cash working capital;cash flow from certain development holdings; and the longer term nature and investment return profile of development holdings.Because of this variability, the Trust evaluates its distribution policy considering these factors, among others.

As we continue to implement our longer term strategy, which includes expanding the development and investment holdingssegment of our portfolio, the Trust expects that for the foreseeable future, cash generated from operating activities will fluctuatefrom period to period and may differ from distributions paid and payable in a single reporting period. Because of the long termnature of the projects in the development and investment holdings segment, cash generated from operating activities from thissegment generally does not occur until later in the operating life cycle of the development holdings. However, these cash flowsare relevant in the determination of distributions, as cash flows relating to the project will ultimately be fully received at projectcompletion. The Trust considers these factors in evaluating its distribution policy as well as its assessment of cash generated fromoperating activities over the longer term.

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


Cash generated from (utilized in) operating activities $ 9,331 $ 1,681 $ 14,225 $ 5,230Distributions paid and payable 7,203 7,319 14,528 14,628Excess (shortfall) of cash generated from (utilized in) operating activities overdistributions paid and payable 2,128 (5,638) (303) (9,398)

On February 20, 2019, the Trust announced the suspension of its Distribution Reinvestment and Unit Purchase Plan ("DRIP") untilfurther notice effective from the February 2019 distribution. Our DRIP entitled unitholders to reinvest all cash distributions intoadditional units. Of the distributions paid and payable, for the three and six months ended June 30, 2019, $nil and $1.8 million(three and six months ended June 30, 2018 - $2.3 million and $4.2 million), respectively, was reinvested into the DRIP.

For the three months ended June 30, 2019, cash generated from operating activities exceeded distributions paid and payable by$2.1 million (three months ended June 30, 2018 shortfall of – $5.6 million). For the six months ended June 30, 2019, distributionspaid and payable exceeded cash generated from operating activities by $0.3 million (six months ended June 30, 2018 – $9.4million).

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


Net Income (loss) from continuing operations $ 4,246 $ (1,354) $ 4,420 $ 3,730Distributions paid and payable 7,203 7,319 14,528 14,628

Excess (shortfall) of net income (loss) from continuing operations overdistributions paid and payable (2,957) (8,673) $ (10,108) $ (10,898)

For the three months ended June 30, 2019, the Trust's distributions paid and payable were in excess of net income from continuingoperations by $3.0 million (three months ended June 30, 2018 – $8.7 million).

For the six months ended June 30, 2019, the Trust's distributions paid and payable exceeded the Trust’s net income from continuingoperations by $10.1 million (six months ended June 30, 2018 – $10.9 million).

Certain assets and liabilities are recognized at fair value in the condensed consolidated financial statements. Unrealized fair valueadjustments and other non-cash items are included in net income (loss) and can fluctuate from period to period. As a result, theTrust anticipates that distributions declared will, in the foreseeable future, continue to vary from net income (loss). The totalunrealized fair value adjustments and other non-cash items included in net income (loss) in the condensed consolidated financialstatements for the periods indicated are summarized in the following table:



Total adjustments to fair values and other non-cash items included in netincome (loss) $ (2,521) $ 4,932 $ (411) $ 5,630

The total adjustments to fair values and other non-cash items included in net income (loss) from continuing operations comprise:deferred income tax expense/recovery, fair value adjustments in development and investment holdings, share of income (loss)from equity accounted investments, deferred compensation expense and other non-cash items.

The Trust funds its working capital needs and investment in lease incentives and initial direct leasing costs with cash on hand andits existing revolving credit facility. As at June 30, 2019, the Trust had cash on hand of $32.3 million and $35.3 million of undrawncredit capacity on its revolving credit facility. To the extent that there are shortfalls in cash flows relative to distributions paid andpayable, the Trust may use the existing revolving credit facility as a source of funding. The use of the Trust’s revolving credit facilitymay involve risks as compared to using cash on hand as a source of funding, such as the risk that interest rates may rise in thefuture, which may make it more expensive for the Trust to borrow under its revolving credit facility, and the risk associated withincreasing the overall indebtedness of the Trust. The Trust will review its distribution policy over time as the Trust executes onthe strategic plan to increase NAV, including the sale of yield assets and our focus on longer-term development assets, to ensurethe distribution policy is reflective of the Trust’s business and asset profile. Accordingly, distributions are considered an economicreturn of capital until cash distributions from completed development projects are received in future years. The Asset Managerreviews the estimated annual distributable cash flow with the Board of Trustees to assist the Board in determining the targeteddistribution amount, taking into consideration the duration of the current assets within the Trust's portfolio and the futureinvestment strategy.

In the three months ended June 30, 2019, the Trust announced that until December 31, 2020 the management fees payable toDAM pursuant to the asset management agreement ("Management Agreement") will be satisfied in Trust units. The Trust unitswill be valued at a NAV per Unit of $8.74, the NAV as at December 31, 2018, for purposes of determining the number of units tobe issued. DAM agreed to accept units in satisfaction of the management fees in order to increase its ownership stake in theTrust and to preserve the business’s cash to support the cash distributions by the Trust while the Trust executes on its strategicplan.


4. CAPITAL RESOURCES AND LIQUIDITY

Our financial position is summarized below:

As atJune 30,

2019December 31,

2018

Consolidated financial positionTotal unitholders' equity $ 580,220 $ 590,258Total unitholders' equity per unit 8.05 8.13NAV⁽¹⁾ 615,950 634,650NAV per unit 8.55 8.74Total contractual debt payable⁽²⁾ 122,138 198,654Total assets 823,736 813,307Cash 32,272 46,730

(1) For details on NAV and reconciliation to total unitholders' equity, please refer to the Financial Overview section of this MD&A under the heading "Reconciliation of NetAsset Value to Total Unitholders' Equity".(2) Includes a revolving credit facility that matures July 31, 2019. As at June 30, 2019, there were no funds drawn on the facility.

The Trust’s primary sources of financing are cash generated from operating activities, lending activities, debt financing andrefinancing, and project financing. Our primary uses of capital include: investments in development and investment holdings,and equity accounted investments, debt principal repayments, interest payments, mortgage lending, distributions, costs ofattracting and retaining tenants, recurring property maintenance and major property improvements. It is the Trust’s objectiveto meet all of our ongoing obligations with current cash, cash flows generated from operating activities, cash from maturinglending portfolio investments and, cash from financing and refinancing activities. The Trust's revolving credit facility providesadditional liquidity and flexibility in support of operations.

SUMMARY OF DEBT

As at June 30, 2019 and December 31, 2018, total debt comprise the following:

As atJune 30,

2019December 31,

2018

Mortgages payable $ 122,138 $ 122,684Term loans — 75,970Total contractual debt payable $ 122,138 $ 198,654Unamortized balance of deferred financing costs (360) (3,162)Total debt $ 121,778 $ 195,492

As at June 30, 2019, total debt decreased by $73.7 million from $195.5 million as at December 31, 2018 as a result of the termloans related to discontinued operations reclassified to liabilities related to assets held for sale.

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

As atJune 30,

2019December 31,

2018

Weighted average effective interest rate (period-end)⁽¹⁾ 3.7% 3.8%Weighted average face rate of interest (period-end) 3.7% 3.8%Debt due within one year $ 29,858 $ 32,646Interest coverage ratio⁽²⁾ (times) 3.98 3.07Debt-to-gross asset value(2) 18.1% 24.4%Debt – average term to maturity (years) 2.16 8.06

(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 sizeof the respective interest bearing debt instruments in the portfolio.

(2) For the Trust's definition of the non-IFRS measure of interest coverage ratio and debt-to-gross asset value and gross asset value, please refer to the Non-IFRSMeasures and Other Disclosures section of this MD&A.

The Trust expects to refinance the debt due within one year, if any, in the normal course as the underlying mortgages and thecredit facility mature.

The debt-to-gross asset value as at June 30, 2019 was 18.1%, lower than 24.4% at December 31, 2018 as a result of the termloans related to the discontinued operations being reclassified to liabilities related to assets held for sale. Management believesthis is a conservative position.

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

Debt maturities

Outstandingbalance dueat maturity

Scheduledprincipal

repayments

Totalmaturity

balance andprincipal

repayments

% of total debtmaturities and

principalrepayments

Weightedaverage

effective interestrate on balancedue at maturity

Weightedaverage face

rate on balancedue at maturity

Mortgages payable2019 $ 27,000 $ 1,431 $ 28,431 23.2% 3.9% 3.9%2020 5,043 2,862 7,905 6.5% 3.3% 3.3%2021 10,329 2,373 12,702 10.4% 3.1% 3.1%2022 71,993 1,107 73,100 59.9% 3.8% 3.8%Subtotal before undernoted $ 114,365 $ 7,773 $ 122,138 100.0% 3.7% 3.7%Unamortized balance of deferred financing costs (net) (360) (360)Total debt $ 114,005 $ 7,773 $ 121,778

As at June 30, 2019, no funds were drawn on the revolving credit facility (December 31, 2018 – $nil) and funds available underthis facility were $35.3 million (December 31, 2018 –$38.0 million), as determined by the formula-based maximum calculation,net of $3.6 million (December 31, 2018 – $1.4 million) of letters of credit issued against the facility. Subsequent to June 30, 2019,the revolving credit facility was renewed with certain financial covenants requirements amended and the maturity date extendedto July 31, 2021.

For the three and six months ended June 30, 2019, regular repayments of mortgages payable and term loans totaled $1.7 millionand $2.3 million, respectively. During the three and six months ended June 30, 2019, there were no lump sum repayments ofmortgages payable.


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

The following are financial covenants required to be met by Dream Alternatives Master LP ("DAM LP"), a wholly owned subsidiaryof the Trust, under the terms of the revolving credit facility, as at June 30, 2019:

Financial Covenant Financial Covenant RequirementUnitholders' Equity ≥ $500,000

Interest Service Coverage Ratio(1) > 2.00

Debt to Total Assets ≤ 55.0%(1) Calculated on a rolling four fiscal quarter basis.

As at June 30, 2019, the Trust was in compliance with these financial covenants.


TOTAL EQUITYAs at June 30, 2019, the Trust had 72,038,551 units outstanding and a unitholders’ equity balance of $580.2 million. The numberof units outstanding decreased from December 31, 2018 as a result of an increase of Units repurchased under the NCIB duringthe six months ended June 30, 2019.

June 30, 2019 December 31, 2018As at Number of units Amount Number of units AmountUnitholders' equity 72,038,551 $ 585,894 72,592,822 $ 591,094Retained earnings (942) 3,143Accumulated other comprehensive income (loss) (4,732) (3,979)Total unitholders' equity 72,038,551 $ 580,220 72,592,822 $ 590,258Non-controlling interests 1,367 1,669Total equity $ 581,587 $ 591,927

The following table summarizes the changes in the outstanding units:

UnitsTotal units outstanding on December 31, 2018 72,592,822Units issued pursuant to the DRIP 271,552Deferred units exchanged for Trust units 51,161Cancellation of Trust units (876,984)Total units outstanding on June 30, 2019 72,038,551

As at August 7, 2019, 72,444,321 Trust units were outstanding.

The Deferred Unit Incentive Plan ("DUIP") provides for the grant of deferred trust units ("DTUs") to trustees of the Trust, officersand employees, as well as affiliates, including the Asset Manager. DTUs are granted at the discretion of the trustees of the Trustand receive distributions in the form of income deferred trust units as they are declared and paid by the Trust. As at June 30,2019, up to a maximum of 3.0 million DTUs were issuable under the DUIP. Distributions on the unvested DTUs are paid in theform of units converted at the market price on the date of distribution. As at June 30, 2019, there were 542,654 deferred trustunits and income deferred trust units outstanding (December 31, 2018 – 457,488 units). As at August 7, 2019, 455,944 deferredtrust units and income deferred trust units were outstanding.

DISTRIBUTION REINVESTMENT AND UNIT PURCHASE PLAN ("DRIP")During the six months ended June 30, 2019, the Trust announced the suspension of its DRIP until further notice effective for theFebruary 2019 distribution.

DISTRIBUTIONSThe distributable cash flow and amount of monthly distributions to unitholders are determined by the Board of Trustees of theTrust based on distributions received from DAM 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 segmentsto assist the Board of Trustees in determining the targeted distribution amount.

2019 2018 2017As at Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2Annualized distribution amount $ 0.400 $ 0.400 $ 0.400 $ 0.400 $ 0.400 $ 0.400 $ 0.400 $ 0.400 $ 0.400Monthly distribution amount $ 0.033 0.033 0.033 0.033 0.033 0.033 0.033 0.033 0.033Annualized distribution rate of return⁽¹⁾ 5.2% 5.6% 6.4% 5.9% 5.8% 6.4% 6.3% 6.6% 6.7%DRIP units issued during the quarter — 271,552 383,952 362,693 360,287 293,323 238,554 223,251 179,219

(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 date specified.

During the three months ended June 30, 2019, as previously mentioned, the Trust announced an agreement to satisfy themanagement fees payable to DAM in units of the Trust until December 2020, confirming its commitment to maintain the existingdistribution policy at $0.40 per unit on an annual basis. Subsequent to June 30, 2019, the Trust issued 316,747 units asconsideration for the management fee payable to DAM.

NORMAL COURSE ISSUER BID Under the Trust's NCIB program, from January 1, 2019 to August 7, 2019, 876,984 units were purchased at a cost of $6.1 millioninclusive of transaction costs. From the inception of the Trust's NCIB program in December 2014 to August 7, 2019, the Trustpurchased for cancellation 4.8 million units for a total cost of $30.3 million. During the three months ended June 30, 2019, theTrust repurchased 0.1 million units at a total cost of $0.8 million.

The following table summarizes the Trust's activity under its NCIB program for the periods ended as indicated:


Units repurchased (number of units) 111,836 467,096 876,984 804,078Total cash consideration $ 798 $ 3,041 $ 6,053 $ 5,174

The Trust received acceptance of its Notice of Intention to renew its prior normal course issuer bid from the TSX on January 11,2019. The bid commenced on January 15, 2019 and will remain in effect until the earlier of January 14, 2020 or the date on whichthe Trust has purchased the maximum number of units permitted under the bid. Under the bid the Trust has the ability to purchasefor cancellation up to a maximum of 6,066,081 units (representing 10% of the Trust’s public float of 60,660,817 units at the timeof entering the bid through the facilities of the TSX).

During the six months ended June 30, 2019, the Trust entered into an automatic securities repurchase plan (the "Plan") in orderto facilitate purchases of its units under the NCIB. The Plan allows for purchases by Dream Alternatives of units at any timeincluding, without limitation, times when the Trust would ordinarily not be permitted to make purchases due to regulatoryrestrictions or self-imposed blackout periods. Purchases will be made by the Trust based upon the parameters prescribed by theTSX and the terms of the parties' written agreement. Outside of such restricted or blackout periods, the Units may also bepurchased in accordance with management’s discretion. The Plan will terminate on January 14, 2020.

SUBSTANTIAL ISSUER BID Subsequent to the second quarter of 2019, the Trust announced its intention to commence a SIB pursuant to which the Trust willoffer to purchase from unitholders of the Trust up to 4 million units at a price of $8.00 per unit. This offer commenced on July24, 2019 and will expire on August 29, 2019 unless terminated or extended by the Trust.

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

Three months ended June 30, Six months ended June 30,

2019 2018 2019 2018

Cash generated from (utilized in) operating activities $ 9,331 $ 1,681 $ 14,225 $ 5,230

Cash generated from (utilized in) investing activities 592 49,316 (5,486) (6,181)Cash generated from (utilized in) financing activities (6,955) 3,075 (18,980) 16,599

Cash generated from operating activities for the three and six months ended June 30, 2019, was $9.3 million and $14.2 million,respectively, compared with $1.7 million and $5.2 million in the same periods in the prior year. The increase in cash generatedfrom operating activities was primarily due to the cash advance of $10.6 million related to the Axis Condominiums developmentand cash distributions of $1.2 million related to Empire Brampton.


Cash generated from investing activities for the three months ended June 30, 2019, was $0.6 million compared with $49.3 milliongenerated in the same period in the prior year. The year over year change was due to the disposition of the marketable securitiesin the prior year.

Cash utilized in investing activities for the six months ended June 30, 2019, was $5.5 million compared with $6.2 million in thesame period in the prior year. There was slightly higher investment activity in the prior period, compared with the current period,partially offset by the proceeds on the disposition of marketable securities.

Cash utilized in financing activities for the three and six months ended June 30, 2019, was $7.0 million and $19.0 million,respectively, compared to cash generated of $3.1 million and $16.6 million in the same period in the prior year. During the threeand six months ended June 30, 2019, the Trust had no advances on its revolving credit facility compared to $13.0 million and$35.0 million in the same periods in the prior year.

COMMITMENTS AND CONTINGENCIESWe conduct our real estate activities from time to time through joint arrangements with third-party partners. A discussion of ourcommitments and contingencies is included in Note 23 of the condensed consolidated financial statements for the three and sixmonths ended June 30, 2019.


5. QUARTERLY FINANCIAL INFORMATION2019 2018(1) 2017(1)

Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3TOTAL INCOME $ 15,703 $ 8,773 $ 13,453 $ 9,676 $ 4,791 $ 11,355 $ 10,622 $ 11,345TOTAL EXPENSES (8,457) (8,796) (8,330) (8,053) (8,408) (8,072) (10,391) (9,859)Fair value adjustments to income properties 261 — 505 (476) (114) (2,110) 10,956 (814)OPERATING INCOME (LOSS) 7,507 (23) 5,628 1,147 (3,731) 1,173 11,187 672Interest and other income 446 640 610 612 857 1,235 1,300 536Transaction costs (445) 15 (227) (12) (60) (77) (45) (855)Fair value adjustments to marketable securities — — — — 615 2,751 2,844 433EARNINGS (LOSS) BEFORE INCOME TAX EXPENSE 7,508 632 6,011 1,747 (2,319) 5,082 15,286 786INCOME TAX RECOVERY (EXPENSE)Current income tax recovery (expense) — — 18 — — — — —Deferred income tax recovery (expense) (3,262) (458) 1,264 (1,905) 965 2 641 (1,725)TOTAL INCOME TAX RECOVERY (EXPENSE) (3,262) (458) 1,282 (1,905) 965 2 641 (1,725)

Net income (loss) from continuing operations $ 4,246 $ 174 $ 7,293 $ (158) $ (1,354) $ 5,084 $ 15,927 $ (939)

Net income (loss) from discontinued operations $ 2,542 $ 756 $ (333) $ 1,547 $ 1,965 $ 886 $ 398 $ 1,401

INCOME TAX RECOVERY (EXPENSE) FROMDISCONTINUED OPERATIONS

Income tax recovery (expense) from discontinuedoperations - current $ (3) $ (1) $ (3) $ (2) $ (4) $ — $ 15 $ (4)

Income tax recovery (expense) from discontinuedoperations - deferred $ 2,054 $ (215) $ 38 $ (379) $ (492) $ (186) $ 37 $ (494)

TOTAL INCOME TAX RECOVERY (EXPENSE) FROMDISCONTINUED OPERATIONS $ 2,051 $ (216) $ 35 $ (381) $ (496) $ (186) $ 52 $ (498)

NET INCOME (LOSS) FROM DISCONTINUING OPERATIONS $ 4,593 $ 540 $ (298) $ 1,166 $ 1,469 $ 700 $ 450 $ 903

TOTAL NET INCOME (LOSS) $ 8,839 $ 714 $ 6,995 $ 1,008 $ 115 $ 5,784 $ 16,377 $ (36)

Total other comprehensive income (loss) from continuingoperations $ 23 $ 30 $ 25 $ 24 $ 24 $ 26 $ 106 $ 614

Total other comprehensive income (loss) fromdiscontinued operations $ (788) $ (18) $ 550 $ (502) $ (794) $ 1,213 $ 264 $ (131)

TOTAL COMPREHENSIVE INCOME (LOSS) 8,074 726 7,570 530 (655) 7,023 16,747 447

NET INCOME (LOSS) PER UNIT(2) $ 0.12 $ 0.01 $ 0.10 $ 0.01 $ — $ 0.08 $ 0.23 $ —NET INCOME (LOSS) PER UNIT FROM CONTINUINGOPERATIONS(2) $ 0.06 $ — $ 0.10 $ — $ (0.02) $ 0.07 $ 0.22 $ (0.01)

TOTAL UNITHOLDERS' EQUITY PER UNIT(2) $ 8.05 $ 8.04 $ 8.13 $ 8.14 $ 8.23 $ 8.34 $ 8.35 $ 8.23NAV PER UNIT $ 8.55 $ 8.71 $ 8.74 $ 8.69 $ 8.77 $ 8.86 $ 8.86 $ 8.67

(1) Certain prior period comparative results have been reclassified to conform to the current year's condensed consolidated financial statement presentation.(2) For the Trust's definition of the following non-IFRS measures; net income (loss) per unit, net income (loss) per unit from continuing operations, total unitholders' equity

per unit, please refer to the Non-IFRS Measures and Other Disclosures section of this MD&A.

As a result of the Trust's implementation of its long term strategy to expand the development and investment holdings segment,the Trust expects that the quarterly/annual results of operation will fluctuate from period to period. This is due to the long termnature of the projects in the development and investment holdings segment.


6. NON-IFRS MEASURES AND OTHER DISCLOSURESWe have presented certain non-IFRS measures because we believe these non-IFRS measures are important in evaluating theTrust's underlying operating performance, debt management and our ability to earn and pay cash distributions to unitholders.These non-IFRS measures do not have standardized meanings prescribed by IFRS and may not be comparable with similar measurespresented by other issuers. Investors are cautioned not to view non-IFRS measures as alternatives to financial measures calculatedin accordance with IFRS.

"Cash generated from (utilized in) operating activities per unit" represents cash generated from (utilized in) operating activitiesof the Trust divided by the number of units outstanding at the end of the period.

"Debt-to-gross asset value" represents the total contractual debt payable for the Trust or operating segment divided by grossasset value, excluding assets held for sale, of the Trust or operating segment as at the applicable reporting date. This non-IFRSmeasure is an important measure in evaluating the amount of debt leverage; however, it is not defined by IFRS, does not have astandardized meaning and may not be comparable with similar measures presented by other issuers. A calculation of debt-to-gross asset value can be found in the Capital Resources and Liquidity section of this MD&A under the heading "Summary of Debt".

"Gross asset value" is total assets per the condensed consolidated financial statements less assets held for sale. This non-IFRSmeasure is an important measure as it includes total assets on a basis consistent with that of total contractual debt payable,which also excludes debt related to assets held for sale when calculating debt-to-gross asset value; however, it is not defined byIFRS, does not have a standardized meaning and may not be comparable with similar measures presented by other issuers.

"Interest coverage ratio" is a non-IFRS measure the Trust believes to be an important measure in determining our ability to coverinterest expense based on our operating performance; however, it is not defined by IFRS, does not have a standardized meaningand may not be comparable with similar measures presented by other issuers. Interest coverage ratio is calculated on a rollingfour fiscal quarter basis as net operating income less general and administrative expenses, all divided by interest expense excludingunamortized balance of mortgages payable premiums. A reconciliation of net income (loss) to NOI can be found in this Non-IFRSMeasures and Other Disclosures section of this MD&A under the heading "Reconciliation of Net Income (Loss) to Net OperatingIncome". The table below calculates the interest coverage ratio for the periods indicated.

June 30, 2019

December 31, 2018

Net operating income, continuing and discontinued operations $ 51,827 $ 42,557General administration expenses (15,750) (15,036)Total $ 36,077 $ 27,521Interest expense incurred, at contractual rate 9,071 8,964Interest coverage ratio (times)⁽¹⁾ 3.98 3.07

(1)Calculated for the rolling four fiscal quarter basis as at June 30, 2019 and December 31, 2018.

"Internal rate of return ("IRR")" for residential development projects is calculated based on the estimated net pre-tax cash flowexpected to be generated from each project considering real estate development revenues, expenditures, construction time-lineand sale dates; however, it is not defined by IFRS, does not have a standardized meaning and may not be comparable with similarmeasures presented by other issuers. This non-IFRS measure is an important measure used by the Trust in evaluating theperformance of its investments.

"Net assets attributable to unitholders of the Trust" refers to the net difference between total assets and total liabilities lessthe amount of assets and liabilities attributable to non-controlling interests. This non-IFRS measure is an important measure inevaluating the Trust’s and Asset Manager’s performance. It is not defined by IFRS, does not have a standard meaning and maynot be comparable with similar measures presented by other issuers.

"Market value" represents the carrying value as per the condensed consolidated statements of financial position adjusted forexternal appraisal values or a discounted cash flow methodology, incorporating expected future cash flows, discount rates, otherapplicable market information and the reduction in the risk profile of the renewable power projects and equity accountedinvestments as they are developed or achieve completion milestones by the Trust. The Trust believes that incorporating thisadjustment in determining the market value of the asset is a more useful measure to value the renewable power portfolio andequity investments that would not ordinarily be captured within IFRS and the Trust's condensed consolidated financial statements.This non-IFRS measure is an important measure used by the Trust in evaluating the Trust’s and Asset Manager’s performance asit is an indicator of the intrinsic value of the Trust; however, it is not defined by IFRS, does not have a standardized meaning andmay not be comparable with similar measures presented by other issuers.


"Net asset value ("NAV") per unit" represents the net asset value attributable to unitholders of the Trust divided by the numberof units outstanding at the end of the period. This non-IFRS measure is an important measure used by the Trust in evaluating theTrust’s performance as it is an indicator of the intrinsic value of the Trust; however, it is not defined by IFRS, does not have astandardized meaning and may not be comparable with similar measures presented by other issuers. A reconciliation of net assetvalue per unit can be found in the Financial Overview section of this MD&A under the heading "Reconciliation of Net Asset Valueto Total Unitholders' Equity".

"Net asset value ("NAV")", a non-IFRS measure, represents total unitholders' equity per the condensed consolidated financialstatements, adjusted for market value adjustments for both renewable power projects and equity accounted investments(including applicable deferred income tax adjustments) and the unamortized balance of the mortgages payable premiums. Amarket value adjustment for renewable power projects developed by the Trust is reflected once they become operational andlong term financing is arranged as well as reflecting recent market information that would indicate a change in the renewablepower portfolio market value (subject to appraisals). A market value adjustment for equity accounted investments is included toaddress the reduction in risk profile as each project progresses toward completion and/or reflect information from recent markettransactions that indicate a change in the equity investment market value (subject to appraisals). The mortgages payable premiumsrepresent the current unamortized balance of fair value adjustments recorded for these instruments at the Trust's listing date.Since the Trust intends to repay the mortgages at maturity, this historical fair value adjustment is removed for the calculation ofthe NAV. The Trust believes that incorporating a market value adjustment is a more useful measure to value both the renewablepower portfolio and equity accounted investments that would not ordinarily be captured within IFRS and the Trust's condensedconsolidated financial statements. The market value adjustments account for the applicable deferred income tax estimatesconsidering the timing of their realization and, if appropriate, will be incorporated into the determination of the NAV. Theapplicable deferred income tax estimates related to the market value adjustments is calculated either based on income or capitalgain rates or a combination thereof. The income tax rates used to determine NAV are dependent on various factors such asanticipated development plans, stage of development and, current market trends applicable to the future development plansand will be reviewed on a regular basis and is subject to change. Excluded from the NAV calculation are any market value adjustmentwith respect to liabilities as well as commitments/contracts that are not otherwise recorded as liabilities on the Trust's balancesheet. The Trust has not appraised the lending portfolio, as the Trust intends to hold the investments in the lending portfolio untilmaturity and its term to maturity is within one year, as such this portfolio is considered fairly liquid and fair value approximatesamortized cost.

This non-IFRS measure is an important measure used by the Trust in evaluating the Trust’s and Asset Manager’s performance asit is an indicator of the intrinsic value of the Trust; however, it is not defined by IFRS, does not have a standardized meaning andmay not be comparable with similar measures presented by other issuers. A reconciliation of net asset value can be found in theFinancial Overview section of this MD&A under the heading "Reconciliation of Net Asset Value to Total Unitholders' Equity".

"Net income (loss) per unit" represents net income (loss) of the Trust divided by the number of units outstanding at the end ofthe period.

"Net income (loss) per unit from continuing operations" represents net income (loss) from continuing operations of the Trustdivided by the number of units outstanding at the end of the period. The Trust excludes the renewable power segment from itscontinuing operations as it is classified as discontinued operations.

"Net operating income ("NOI")" is defined by the Trust as net income (loss) per the condensed consolidated financial statementsadjusted for: income tax expense (recovery), interest expense net of other interest income, depreciation and amortization,transaction costs, debt settlement costs, provision for lending portfolio losses, general and administrative expenses, fair valueadjustments to income properties, fair value adjustments to development and investment holdings, and fair value adjustmentsto marketable securities. This non-IFRS 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 measurespresented by other issuers. Reconciliations of NOI to net income (loss) can be found in this Non-IFRS Measures and OtherDisclosures section of this MD&A under the heading "Reconciliation of Net Income (Loss) to Net Operating Income".

"Total contractual debt payable" represents total debt per the condensed consolidated statements of financial position less notepayable, unamortized balance of mortgages payable premiums and unamortized balance of deferred financing costs. This non-IFRS measure is an important measure used in the management of our debt levels as an indicator of principal amounts outstanding;however, it is not defined by IFRS, does not have a standardized meaning and may not be comparable with similar measurespresented by other issuers. A reconciliation of total contractual debt payable to total debt per the condensed consolidatedfinancial statements can be found in the Capital Resources and Liquidity section of this MD&A under the heading "Summary ofDebt".


"Total unitholders' equity per unit" represents the total unitholders' equity of the Trust divided by the number of units outstandingat the end of the period.


RECONCILIATION OF NET INCOME (LOSS) TO NET OPERATING INCOME

For the three months ended June 30, 2019

Developmentand

investmentholdings

Lendingportfolio

Incomeproperties Other⁽¹⁾

Totalcontinuingoperations

Renewable -discontinued

operations Total

NET INCOME (LOSS) $ 6,456 $ 3,722 $ 1,578 $ (7,510) $ 4,246 $ 4,593 $ 8,839Add (Deduct):

Income tax expense (recovery) — — — 3,262 3,262 (2,051) 1,211Interest expense net of other interest income (337) — 1,167 (16) 814 1,029 1,843Fair value adjustments to income properties — — (261) — (261) — (261)Depreciation and amortization — — — — — 589 589Transaction costs — 4 327 114 445 — 445General and administrative expenses — — — 4,150 4,150 — 4,150Fair value adjustments to development andinvestment holdings 4,054 — — — 4,054 — 4,054

NET OPERATING INCOME $ 10,173 $ 3,726 $ 2,811 $ — $ 16,710 $ 4,160 $ 20,870

For the three months ended June 30, 2018

Developmentand

investmentholdings

Lendingportfolio




operations Total

NET INCOME (LOSS) $ (4,824) $ 4,102 $ 2,591 $ (3,223) $ (1,354) $ 1,469 $ 115Add (Deduct):

Income tax expense (recovery) — — — (965) (965) 496 (469)Interest expense net of other interest income (338) — 675 265 602 928 1,530Fair value adjustments to income properties — — 114 — 114 — 114Depreciation and amortization — — — — — 1,514 1,514Transaction costs — 72 (12) — 60 — 60Fair value adjustments to marketable securities — — (658) 43 (615) — (615)General and administrative expenses — — — 3,880 3,880 — 3,880Fair value adjustments to development andinvestment holdings 5,157 — — — 5,157 — 5,157

NET OPERATING INCOME $ (5) $ 4,174 $ 2,710 $ — $ 6,879 $ 4,407 $ 11,286

For the six months ended June 30, 2019

Developmentand

investmentholdings

Lendingportfolio




operations Total

NET INCOME (LOSS) $ 6,007 $ 7,255 $ 3,109 $ (11,951) $ 4,420 $ 5,133 $ 9,553Add (Deduct):

Income tax expense (recovery) — — — 3,720 3,720 (1,835) 1,885Interest expense net of other interest income (675) — 2,357 (227) 1,455 2,056 3,511Fair value adjustments to income properties — — (261) — (261) — (261)Depreciation and amortization — — — — — 2,310 2,310Transaction costs — 7 309 114 430 — 430General and administrative expenses — — — 8,344 8,344 — 8,344Fair value adjustments to development andinvestment holdings 4,564 — — — 4,564 — 4,564

NET OPERATING INCOME $ 9,896 $ 7,262 $ 5,514 $ — $ 22,672 $ 7,664 $ 30,336(1) Other includes Trust and segment level cash and net working capital balances.


Developmentand

investmentholdings

Lendingportfolio




operations Total

NET INCOME (LOSS) $ (2,680) $ 7,778 $ 5,773 $ (7,141) $ 3,730 $ 2,169 $ 5,899Add (Deduct):

Income tax expense (recovery) — — — (967) (967) 682 (285)Interest expense net of other interest income (675) — 1,033 187 545 1,853 2,398Fair value adjustments to income properties — — 2,224 — 2,224 — 2,224Depreciation and amortization — — — — — 3,026 3,026Transaction costs — 82 55 — 137 — 137Fair value adjustments to marketable securities — — (3,657) 291 (3,366) — (3,366)General and administrative expenses — — — 7,630 7,630 — 7,630Fair value adjustments to development andinvestment holdings 3,403 — — — 3,403 — 3,403

NET OPERATING INCOME $ 48 $ 7,860 $ 5,428 $ — $ 13,336 $ 7,730 $ 21,066(1) Other includes Trust and segment level cash and net working capital balances.


7. DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROLOVER FINANCIAL REPORTING

The Trust does not have a Chief Executive Officer or a Chief Financial Officer. At June 30, 2019, the President and Chief ResponsibleOfficer and Chief Financial Officer of DAM (the "Certifying Officers"), are responsible for and, along with the assistance of seniormanagement of the Asset Manager, have designed or caused to be designed under the Certifying Officer’s 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 theCertifying Officers in a timely manner and information required to be disclosed by the Trust is recorded, processed, summarizedand 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 condensedconsolidated financial statements in accordance with IFRS.

During the three and six months ended June 30, 2019, there have not been any changes that have materially affected, or arereasonably likely to materially affect, the internal controls over financial reporting.

8. RISKS AND RISK MANAGEMENTFor information concerning Risks and Risk Management please refer to the 2018 Annual Report and the 2018 Annual InformationForm, which are found on our website at www.dreamalternatives.ca and filed electronically on the System for Electronic DocumentAnalysis and Retrieval ("SEDAR") at www.sedar.com.

Although we believe that the risk factors described in our 2018 Annual Report and in our 2018 Annual Information Form are themost material risks that we will face, they are not the only risks. Additional risk factors not presently known to us or that wecurrently believe are immaterial could also materially adversely affect our investments, future prospects, cash flows, results ofoperations or financial condition and our ability to make cash distributions to unitholders and thereby adversely affect the valueof our units. The occurrence of any of such risks could materially and adversely affect our investments, future prospects, cashflows, results of operations or financial condition and our ability to make cash distributions to unitholders.

9. SIGNIFICANT ACCOUNTING POLICIES


9.1 CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the condensed consolidated financial statements requires management to make judgments, estimates andassumptions that affect the amounts reported. Management bases its judgments and estimates on historical experience andother factors it believes to be reasonable under the circumstances, but which are inherently uncertain and unpredictable, theresult of which forms the basis of the carrying amounts of assets and liabilities. However, uncertainty about these assumptionsand estimates could result in outcomes that could require a material adjustment to the carrying amount of the affected asset orliability in the future. Dream Alternatives’ critical accounting judgments, estimates and assumptions in applying accountingpolicies are described in Note 4 to the condensed consolidated financial statements.

9.2 ADOPTION OF ACCOUNTING STANDARDS

CURRENT ACCOUNTING POLICY CHANGESRefer to Note 5 of the condensed consolidated financial statements for the three and six months ended June 30, 2019 forinformation pertaining to accounting standards adopted during the period.

10. BASIS OF PRESENTATION

This MD&A is a discussion of the operating results, cash flows and financial position of Dream Alternatives and should be readin conjunction with the condensed consolidated financial statements of Dream Alternatives for the three and six months endedJune 30, 2019, prepared in accordance with IFRS.

When we refer to terms such as "we", "us", and "our", we are referring to the Trust, Dream Alternatives Master LP and itssubsidiaries. When we refer to the term "units" we are referring to the units of the Trust. When we refer to "unitholders" we arereferring to holders of the units of the Trust.

Certain information herein contains or incorporates comments that constitute forward-looking information within the meaningof applicable securities legislation, including, but not limited to, statements relating to the Trust’s objectives and strategies toachieve those objectives; the Trusts’ beliefs, plans, estimates, projections and intentions, and similar statements concerninganticipated future events, future growth and drivers thereof, results of operations, performance, business prospects andopportunities, market conditions, acquisitions or divestitures, leasing transactions, future maintenance and development plansand costs, capital investments, financing, the availability of financing sources, income taxes, litigation and the real estate, lendingand renewable power industries in general, in each case, that are not historical facts as well as statements regarding our strategicplan; our unit buyback program (including the amounts to be deployed, the timing, price and size of any offers to unitholders);our commitment to maintaining the current distribution policy; our expectations regarding our capital recycling programs,including the expecting timing of the disposition of the renewable power operating segment; our plans and proposals for currentand future development and investment holdings projects, including equity accounted investments, and income propertiesredevelopment projects, including projected sizes, densities, uses, costs and manner of funding, and development milestones;development timelines on current and future development and investment holdings projects, including equity accountedinvestments, and income properties redevelopment projects, including expected commencement, completion and occupancydates; anticipated returns from our development and investment holdings projects, including equity accounted investments, aswell as their future contributions to NAV and unitholder value and their ability to drive the Trust’s growth; timing of distributionsor future cash return from our development and investment holdings portfolio; our targeted return on equity (levered andunlevered), income and cash flow growth, NAV growth and targeted pre-tax IRR; our methodologies for valuing investments,including market value adjustments, and timing of appraisals; the anticipated future variability in our results of operations,including cash from operating activities and net income; expected debt financings and the timing thereof; our expectationsregarding the Trust’s income tax expense/recovery and deferred tax liabilities/assets. Forward-looking statements generally canbe identified by words such as "objective", "may", "will", "would", "expect", "intend", "estimate", "anticipate", "believe", "should","could", "likely", "plan", "project", "continue" or similar expressions suggesting future outcomes or events. Forward-lookinginformation is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyondthe Trust's control, which could cause actual results to differ materially from those disclosed in or implied by such forward-lookinginformation. The assumptions, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth

herein as well as assumptions relating to general and local economic and business conditions; the regulatory environment; thereal estate market in general; the financial condition of tenants and borrowers; interest and mortgage rates; timing and amountof future loan financings and deposit commitments; leasing risks, including those associated with the ability to lease vacant space;our ability to source and complete accretive acquisitions and renewable power projects; and the development, construction andoperation of our real estate and renewable power projects on anticipated terms.

All the forward-looking statements contained in this MD&A are based on what we believe are reasonable assumptions; therecan be no assurance that actual results will be consistent with these forward-looking statements. Factors or risks that could causeactual results to differ materially from those set forth in the forward-looking statements and information include, but are notlimited to, general economic conditions; changes to the regulatory environment; environmental risks; local real estate conditions,including the development of properties in close proximity to the Trust’s properties and changes in real estate values; timelyleasing of vacant space and re-leasing of occupied space upon expiration; dependence on tenants’ and borrowers’ financialcondition; the uncertainties of acquisition activity; the ability to effectively integrate acquisitions; dependence on our partnersin the development, construction and operation of our real estate and renewable power projects; uncertainty surrounding thedevelopment and construction of new projects and delays and cost overruns in the design, development, construction andoperation of projects; adverse weather conditions and variability in wind conditions and solar irradiation; our ability to executestrategic plans and meet financial obligations; interest and mortgage rates and regulations; inflation; availability of equity anddebt financing; foreign exchange fluctuations; and other risks and factors described from time to time in the documents filed bythe Trust with securities regulators.

All forward-looking information is as of August 7, 2019. Dream Alternatives does not undertake to update any such forward-looking 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.dreamalternatives.ca.

Certain market information has been obtained from Standard & Poor’s publications prepared by independent, third partycommercial 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 andmake no representation as to its accuracy.

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


11. ADDITIONAL INFORMATION


11.1 SUMMARY OF DEVELOPMENT AND INVESTMENT HOLDINGS AND CORE INCOMEPROPERTIES

DEVELOPMENT HOLDINGS

Empire Lakeshore (Etobicoke, Ontario)Empire Lakeshore, in which the Trust has an 80% interest, is a condominium development comprising two towers, the WaterTower and Sky Tower. The project is located in Etobicoke, Ontario and comprise 49 and 66 storeys for the Water and Sky Tower,respectively. With 99% of the 1,280 total projected condominium units sold, the project is expected to be completed and occupiedin phases through to the first quarter of 2020.

Empire Brampton (Brampton, Ontario)Empire Brampton, in which the Trust has an interest of 78.8%, is a low-rise project that is substantially completed. Amountsoutstanding pertaining to this investment represent customary cash hold backs expected to be released over the next two years.

INVESTMENT HOLDINGS

Hard Rock/Virgin Hotel Las Vegas (Las Vegas, Nevada)The Hard Rock Hotel in Las Vegas, Nevada, in which the Trust has a 10% interest, is planning to open as a re-conceptualized andrevitalized Virgin Hotel in late 2020. The hotel will include 1,504 suites, a 60,000 sf fully-renovated casino and world classrestaurants. The property is located at 4455 Paradise Road in Las Vegas on 30 acres of land and is situated 1 mile east of the stripand 2 miles from the McCarron airport.

Bayfield LP (Kingston, Ontario)Bayfield LP consists of a 13.2% interest in a separate limited partnership that has a co-ownership interest in a shopping centre.

EQUITY ACCOUNTED INVESTMENTS

Zibi Development (Ottawa, Ontario)Zibi is a 34-acre mixed-use waterfront development along the Ottawa River in Gatineau, Quebec and Ottawa, Ontario. The projectis a multi-phase development that includes over 4 million sf of density consisting of over 1,800 residential units (inclusive of over400 residential rental units) and over 2 million sf of commercial space. Land servicing on both the Ontario and Quebec landscontinues and construction is underway on the project's next residential building, Kanaal, a 71-unit condominium building inOttawa, expected to occupy by early 2020. In total, there is over 605,000 sf of retail and commercial space in various planning /development stages at Zibi.

Brightwater Development (Mississauga, Ontario)Brightwater (formerly referred to as ''Port Credit'') is a 72-acre waterfront property for development in Mississauga's Port Creditarea, with plans to transform the site into a complete, vibrant and diverse waterfront community. The property is expected tobe redeveloped into a large master-planned residential/mixed-use community which includes approximately 3,000 residentialunits and 400,000 sf of retail and commercial space. Remediation work on the site is currently underway.

Frank Gehry Development (Toronto, Ontario)The Frank Gehry development, designed by renowned architect Frank Gehry, is slated to comprise of two landmark residentialtowers, each in excess of 80 storeys. The project will consist over 80,000 sf of multi-level luxury retail opportunities, including apotential hotel component and an art gallery. The development is located at the intersection of King Street West and DuncanStreet in downtown Toronto.

Lakeshore East Development (Toronto, Ontario)The Lakeshore East development is a 5.3 acre waterfront property in downtown Toronto located adjacent to a planned investmentby Sidewalk Labs, a sister company of Google. The project is in the pre-development and planning stages which has approximately1 million sf of density to be realized.

100 Steeles (Toronto, Ontario)100 Steeles is currently a 62,000 sf income producing retail property that is 89% leased, located north of Toronto, steps awayfrom the proposed Yonge-North subway extension. 100 Steeles is planned for much higher density beyond current zoning thatwould include over 1 million sf of residential and mixed-use development.

West Don Lands (Toronto, Ontario)West Don Lands is a purpose-built multi-family rental apartment community in Toronto's downtown east end adjacent to theDistillery District and the Canary District. The development will feature approximately 1,500 rental units including an affordablecomponent, as well as ancillary retail and potential office space. The first fully-zoned block for development is slated forconstruction in the fall of 2019 and features approximately 750 rental units and 4,000 sf of retail space.

Plaza Bathurst Development (Toronto, Ontario)The Plaza Bathurst investment includes two properties which are located at 6035 Bathurst Street and 388-390 Dupont Street indowntown Toronto. The Bathurst property is a 19,000 sf commercial property and the Dupont Property is a 7,000 sf fully leaseddistribution centre.

Plaza Imperial Development (Toronto, Ontario)The Plaza Imperial investment includes two properties which are located at 25 Imperial Street and 374 Dupont Street. The ImperialStreet property is a 22,000 sf office property and the Dupont Street property is an 11,000 sf fully leased commercial property.

Seaton Development (Pickering, Ontario)Seaton Development is a fully-zoned 395-acre land and housing development in the city of Pickering, Ontario.

Axis Condominiums (Toronto, Ontario)Axis Condominiums is a 38 storey development, located in downtown Toronto, comprising of over 500 units and retail space onthe ground floor. Construction on the project is complete and, occupancy and closings began in May 2019.

Queen & Mutual (Toronto, Ontario)Queen and Mutual is a mixed-use condominium development, located in downtown Toronto. The building is designed by IBIArchitects proposing 356 residential condo units, retail uses and community space. The investment acquired various retailinvestment properties located along the Mutual Street and Queen Street East intersection.

IVY Condominiums (Toronto, Ontario)IVY Condominiums is located in downtown Toronto’s garden district close to the Eaton Centre, Dundas subway station and manyrestaurants.

INCOME PRODUCING CORE PROPERTIES

49 Ontario Street (Toronto, Ontario)49 Ontario Street, an office property wholly owned by the Trust. The 87,805 sf income property, is located in downtown Torontoclose to the financial district in an area undergoing extensive redevelopment.

10 Lower Spadina (Toronto, Ontario)10 Lower Spadina, an office property wholly owned by the Trust. This 60,652 sf, 7-storey building, is located on Toronto's primewaterfront, in close proximity to the financial district and transit, with redevelopment potential.

349 Carlaw (Toronto, Ontario)349 Carlaw, an office property wholly owned by the Trust. This 33,894 sf, 3-storey building, is located in a mixed commercial andresidential neighbourhood in close proximity to Toronto's Queen Street neighbourhood.

Sussex Centre (Mississauga, Ontario)Sussex Centre, is a 50.1% co-owned income property with Dream Office REIT. The 652,856 sf centre, includes 2 buildings locatedin Mississauga, Ontario, offering prime office and retail space.

Industrial Portfolio (Regina, Saskatchewan)The industrial portfolio is 50.1% co-owned income properties with the Dream Industrial REIT. The 118,732 sf portfolio, includes6 properties in Western Canada.


11.2 TAX INFORMATION

The Trust pays a monthly distribution to its unitholders of which only a portion is taxable. A taxable Canadian holder of the Trustunits is required to include the taxable portion of the distribution in income. Any amount in excess of the after-tax net incomeof the Trust payable to the unitholder will generally not be included in the unitholders' income for the year. The non-taxableportion 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:

2018 2017 2016 2015 2014Non-eligible dividends 0.02% 0.06% —% —% —%Eligible dividends —% —% —% 28.60% 14.97%Return of capital 95.00% 99.94% 100.00% 71.40% 85.03%Foreign non-business income 4.98% —% —% —% —%


11.3 ADDITIONAL INFORMATION

Additional information relating to Dream Hard Asset Alternatives Trust, including the Trust's Annual Information Form and auditedconsolidated financial statements and accompanying notes, available on SEDAR at www.sedar.com. The Trust’s voting units tradeon the TSX under the symbol "DRA.UN".

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION(unaudited)

(in thousands of Canadian dollars) NoteJune 30,

2019December 31,

2018

ASSETSNON-CURRENT ASSETSDevelopment and investment holdings 7 $ 105,250 $ 118,609Lending portfolio 8 49,411 47,127Income properties 9 226,839 224,310Renewable power assets 10 — 130,615Deferred income taxes 19 — 323Other non-current assets 5,192 6,493Equity accounted investments 11 156,696 132,528TOTAL NON-CURRENT ASSETS 543,388 660,005CURRENT ASSETSLending portfolio 8 95,881 96,968Amounts receivable 3,595 3,463Income tax receivable 47 1,707Prepaid expenses and other current assets 415 4,434Cash 32,272 46,730TOTAL CURRENT ASSETS 132,210 153,302Assets held for sale 6 148,138 —

TOTAL ASSETS $ 823,736 $ 813,307

LIABILITIESNON-CURRENT LIABILITIESDebt 12 91,920 162,846Deferred income taxes 19 1,572 —Deferred units incentive plan 2,970 2,166TOTAL NON-CURRENT LIABILITIES 96,462 165,012CURRENT LIABILITIESDebt 12 29,858 32,646Amounts payable and accrued liabilities 13 30,180 23,722TOTAL CURRENT LIABILITIES 60,038 56,368Liabilities related to assets held for sale 6 85,649 —TOTAL LIABILITIES 242,149 221,380

UNITHOLDERS' EQUITYUnitholders' equity 585,894 591,094Retained earnings (deficit) (942) 3,143Accumulated other comprehensive income (loss) 15 (4,732) (3,979)TOTAL UNITHOLDERS' EQUITY 580,220 590,258Non-controlling interests 6 1,367 1,669TOTAL EQUITY 581,587 591,927TOTAL LIABILITIES AND EQUITY $ 823,736 $ 813,307See the accompanying notes to the condensed consolidated financial statements.Commitments and contingencies (Note 23).

On behalf of the Board of Trustees of Dream Hard Asset Alternatives Trust:

"Amar Bhalla" "Karine MacIndoe"

Amar Bhalla Karine MacIndoeChair Trustee


CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME (LOSS)(unaudited)

Three months ended June 30, Six months ended June 30,(in thousands of Canadian dollars) Note 2019 2018 2019 2018

INCOMEFair value adjustments and operating cash distributions in developmentand investment holdings $ (3,947) $ (4,986) $ (4,290) $ (3,062)

Lending portfolio interest income and lender fees 3,726 4,174 7,262 7,860Income properties revenue 16 5,858 5,779 11,882 11,641Share of income (loss) from equity accounted investments 11 10,066 (176) 9,622 (293)TOTAL INCOME 15,703 4,791 24,476 16,146

EXPENSESIncome properties, operating (3,047) (3,069) (6,368) (6,213)Interest expense 17 (1,260) (1,459) (2,541) (2,637)General and administrative 18 (4,150) (3,880) (8,344) (7,630)TOTAL EXPENSES (8,457) (8,408) (17,253) (16,480)

Fair value adjustments to income properties 9 261 (114) 261 (2,224)

OPERATING INCOME (LOSS) 7,507 (3,731) 7,484 (2,558)

Interest and other income 446 857 1,086 2,092Transaction costs (445) (60) (430) (137)Fair value adjustments to marketable securities — 615 — 3,366EARNINGS (LOSS) BEFORE INCOME TAX RECOVERY (EXPENSE) 7,508 (2,319) 8,140 2,763

INCOME TAX RECOVERY (EXPENSE)Current income tax recovery (expense) 19 — — — —Deferred income tax recovery (expense) 19 (3,262) 965 (3,720) 967TOTAL INCOME TAX RECOVERY (EXPENSE) (3,262) 965 (3,720) 967

NET INCOME (LOSS) FROM CONTINUING OPERATIONS 4,246 (1,354) 4,420 3,730

Net income (loss) from discontinued operations before tax 6 2,542 1,965 3,298 2,851Income tax recovery (expense) from discontinued operations - current (3) (4) (4) (4)Income tax recovery (expense) from discontinued operations - deferred 2,054 (492) 1,839 (678)NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS 4,593 1,469 5,133 2,169

NET INCOME (LOSS) 8,839 115 9,553 5,899

NET INCOME (LOSS) ATTRIBUTABLE TOUnitholders $ 8,672 $ (36) $ 9,145 $ 5,489Non-controlling interests - discontinued operations 167 151 408 410NET INCOME (LOSS) $ 8,839 $ 115 $ 9,553 $ 5,899

See the accompanying notes to the condensed consolidated financial statements.


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(LOSS)(unaudited)

Three months ended June 30, Six months ended June 30,(in thousands of Canadian dollars) Note 2019 2018 2019 2018

NET INCOME (LOSS) 8,839 115 9,553 5,899

OTHER COMPREHENSIVE INCOME (LOSS)Realized fair value gain from derivative financial liability hedge, net oftax 15 23 24 53 50

TOTAL OTHER COMPREHENSIVE INCOME (LOSS) FROM CONTINUINGOPERATIONS 23 24 53 $ 50

Other comprehensive income (loss) from discontinued operations 6, 15 (788) (794) (806) 419TOTAL COMPREHENSIVE INCOME (LOSS) 8,074 (655) 8,800 6,368

TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TOUnitholders $ 7,907 $ (806) $ 8,392 $ 5,958Non-controlling interests - discontinued operations 167 151 408 410TOTAL COMPREHENSIVE INCOME (LOSS) $ 8,074 $ (655) $ 8,800 $ 6,368

TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TOContinuing operations $ 4,269 $ (1,330) $ 4,473 $ 3,780Discontinued operations 3,805 675 4,327 2,588TOTAL COMPREHENSIVE INCOME (LOSS) $ 8,074 $ (655) $ 8,800 $ 6,368

See the accompanying notes to the condensed consolidated financial statements.


CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(unaudited)


(in thousands of Canadian dollars, except for number of units) Note

Number ofunits

Unitholders'equity

Retainedearnings(deficit)

Accumulatedother

comprehensiveincome (loss)

Non-controlling

interests Total

Balance as at January 1, 2019 72,592,822 $ 591,094 $ 3,143 $ (3,979) $ 1,669 $ 591,927Net income (loss) for the period — — 9,145 — 408 9,553Other comprehensive income (loss) — — — (753) — (753)Distributions paid and payable 14 — — (14,528) — — (14,528)Distribution Reinvestment Plan 14 271,552 1,779 — — — 1,779Deferred units exchanged for Trust units 51,161 372 — — — 372Cancellation of Trust units 14 (876,984) (7,351) 1,298 — — (6,053)Distributions to non-controlling interests — — — — (710) (710)Balance as at June 30, 2019 72,038,551 $ 585,894 $ (942) $ (4,732) $ 1,367 $ 581,587


(in thousands of Canadian dollars, except for number of units) Note

Number ofunits

Unitholders'equity

Retainedearnings

Accumulatedother

comprehensiveincome (loss)

Non-controlling

interests Total

Balance as at January 1, 2018 72,417,786 $ 592,269 $ 16,687 $ (4,250) $ 1,948 $ 606,654IFRS 9 adoption adjustment — — 295 (295) — —Restated balance as at January 1, 2018 72,417,786 $ 592,269 $ 16,982 $ (4,545) $ 1,948 $ 606,654Net income (loss) for the period — — 5,489 — 410 5,899Other comprehensive income (loss) — — — 469 — 469Distributions paid and payable 14 — — (14,628) — — (14,628)Distribution Reinvestment Plan 14 653,610 4,199 — — — 4,199Deferred units exchanged for Trust units 44,784 288 — — — 288Cancellation of Trust units 14 (804,078) (6,747) 1,573 — — (5,174)Distributions to non-controlling interests — — — — (475) (475)Balance as at June 30, 2018 72,312,102 $ 590,009 $ 9,416 $ (4,076) $ 1,883 $ 597,232See the accompanying notes to the condensed consolidated financial statements.


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited)

Three months ended June 30, Six months ended June 30,(in thousands of Canadian dollars) Note 2019 2018 2019 2018Net income (loss)

Continuing operations $ 4,246 $ (1,354) $ 4,420 $ 3,730Discontinued operations 4,593 1,469 5,133 2,169

Net income 8,839 115 9,553 5,899Non-cash and other items:Amortization and depreciation 22 804 1,583 2,744 3,194Other adjustments 22 (7,210) (651) (7,800) (1,840)Change in non-cash working capital 22 7,425 1,357 9,764 (404)Investment in lease incentives and initial direct leasing costs (527) (723) (1,274) (1,619)Cash distributions from development and investment holdings 7 — — 1,238 —Generated from (utilized in) operating activities $ 9,331 $ 1,681 $ 14,225 $ 5,230

Generated from (utilized in) investing activitiesInvestments in building improvements (1,110) (165) (1,938) (1,187)Cash advances to development and investment holdings 7 (2,750) — (2,750) —Net proceeds from disposal of development and investmentholdings, net of transaction costs 7 10,307 — 10,307 —

Additions to renewable power assets — (299) — (586)Lending portfolio additions 8 (59) (238) (59) (24,846)Principal repayments received from lending portfolio 8 — 1,505 3,500 18,659Acquisition of investment holdings — — — (37,926)Proceeds from sale of marketable securities — 60,555 — 64,003Investments in equity accounted investments (5,796) (12,042) (14,546) (24,298)Generated from (utilized in) investing activities $ 592 $ 49,316 $ (5,486) $ (6,181)

Generated from (utilized in) financing activitiesChanges in restricted cash balance 2,901 (35) 2,863 (69)Mortgages and term loan repayments 12 (1,727) (1,680) (2,312) (2,250)Contributions (distributions) to non-controlling interests (124) (193) (710) (475)Advance (repayment) on revolving credit facility, net — 13,000 — 35,000Distributions paid on units 14 (7,207) (4,976) (12,768) (10,433)Trust units repurchased and cancelled 14 (798) (3,041) (6,053) (5,174)Generated from (utilized in) financing activities $ (6,955) $ 3,075 $ (18,980) $ 16,599Foreign exchange on cash held in foreign currency $ (57) $ (62) $ (53) $ 20Increase (decrease) in cash $ 2,911 $ 54,010 $ (10,294) $ 15,668Cash, beginning of the period 33,525 22,585 46,730 60,927Cash classifed within assets held for sale (4,164) — (4,164) —Cash, end of the period $ 32,272 $ 76,595 $ 32,272 $ 76,595See the accompanying notes to the condensed consolidated financial statements.


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited, all dollar amounts are presented in thousands of Canadian dollars, except for unit, per unit, and Megawatt (MW) amounts, unless otherwise stated)


1. ORGANIZATION

Dream Hard Asset Alternatives Trust ("Dream Alternatives" or the "Trust") is an open-ended trust established under the laws ofthe Province of Ontario by a Declaration of Trust dated April 28, 2014, amended and restated on July 8, 2014. The condensedconsolidated financial statements of Dream Alternatives include the accounts of Dream Alternatives and its consolidatedsubsidiaries. The Trust was formed by and is managed by Dream Asset Management Corporation ("DAM" or the "Asset Manager"),a wholly owned subsidiary of Dream Unlimited Corp. ("Dream"). On January 1, 2018, Dream acquired control of the Trust, basedon Dream's increased exposure to variable returns resulting from increased ownership through units held in the Trust and fromnew real estate joint venture agreements. Dream is the ultimate parent company of the Trust.

The Trust is focused on hard asset alternative investments comprising real estate development, real estate lending, and incomeproperties.

The Trust’s registered office is 30 Adelaide Street East, Suite 301, Toronto, Ontario, Canada, M5C 3H1. The Trust is listed on theToronto Stock Exchange ("TSX") under the symbol "DRA.UN". Dream Alternatives’ condensed consolidated financial statementsfor the three and six months ended June 30, 2019 were authorized for issuance by the Board of Trustees on August 7, 2019.

For simplicity, throughout the notes, reference is made to the units of the Trust as follows:• "units" meaning Trust voting units, and• "unitholders" meaning holders of Trust voting units.

2. BASIS OF PRESENTATION AND STATEMENT OF COMPLIANCE

The condensed consolidated financial statements have been prepared in accordance with International Accounting Standard("IAS") 34, "Interim Financial Reporting", as issued by the International Accounting Standards Board ("IASB"). Accordingly, certaininformation and footnote disclosures normally included in the annual consolidated financial statements prepared in accordancewith International Financial Reporting Standards ("IFRS") have been omitted or condensed. The condensed consolidated financialstatements should be read in conjunction with the Trust’s annual consolidated financial statements for the year ended December31, 2018, which have been prepared in accordance with IFRS, as issued by the IASB.

Certain prior period comparative results have been reclassified to conform to the current year's condensed consolidated financialstatement presentation.

3. ACCOUNTING POLICIES SELECTED AND APPLIED FOR SIGNIFICANT TRANSACTIONS AND EVENTS

These condensed consolidated financial statements have been prepared using the same significant accounting policies andmethods as those used in the Trust’s annual financial statements for the year ended December 31, 2018, except as describedbelow:

LEASESLeases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is availablefor use by the Trust. At the commencement date, right-of-use assets are measured at cost, which comprises the initial amountof the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costsincurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site onwhich it is located, less any lease incentives received. Subsequent to the commencement date the right-of-use asset is measuredat cost less any accumulated depreciation. The right-of-use asset is depreciated over the shorter of the asset's useful life and thelease term on a straight-line basis. The lease term is determined as the non-cancellable period of a lease plus the period coveredby an option to extend the lease if the lessee is reasonably certain to exercise that option as well as the periods covered by anoption to terminate the lease if the lessee is reasonably certain not to exercise that option. The Trust exercises judgment whenreviewing the lease terms particularly the options to extend or terminate the lease and whether reasonable certainty exists toexercise either option. In addition, the right-of-use asset is assessed for impairment and adjusted for certain remeasurement ofthe lease liability. The fair value model will be applied if the right-of-use asset meets the definition of an investment property.

Lease liabilities are measured at the present value of the lease payments that are not paid at the date at which the leased assetis available for use. Certain leases contain variable lease payments that are linked to an index resulting in an increase in the annuallease payments to capture inflation. Variable lease payments are initially measured using the index or rate as at thecommencement date of the lease term. The lease liability is remeasured when there is a change in future lease payments arisingfrom a change in an index or rate, or if there is a change on exercising a purchase, extension or termination option, if applicable.Upon remeasurement of the lease liability, a corresponding adjustment is reflected to the carrying amount of the right-of-useasset or is recorded in the consolidated statement of comprehensive income (loss) if the carrying amount of the right-of-useasset has been reduced to zero. The lease payments are discounted using the interest rate implicit in the lease, if that rate cannotbe determined, the lessee’s incremental borrowing rate is used. Generally, the Trust uses its incremental borrowing rate as thediscount rate and risk adjusts it to consider various factors including the current economic environment, remaining term, andsecurity. The weighted average incremental borrowing rate applied as at the January 1, 2019, date of adoption of IFRS 16, is4.65%. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the consolidatedstatement of comprehensive income (loss) over the lease period.

The Trust presents the right-of-use assets in renewable power assets and the lease liability is presented in accounts payable andaccrued liabilities in the condensed consolidated statement of financial position.

The Trust has elected not to recognize right-of-use assets and lease liabilities for short-term leases and leases of low value. Thosepayments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis and are recordedin the condensed consolidated statement of comprehensive income (loss). Short-term leases are identified as those with a leaseterm of less than one year. Low-value assets are those less than or equal to five thousand dollars.

NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONSNon-current assets are classified as assets held for sale when their carrying value will be recovered principally through a saletransaction rather than through continuing use. The asset (or disposal group) must be available for immediate sale in its presentcondition subject only to terms that are usual and customary for sales of such assets (or disposal groups), the appropriate levelof management must be committed to a plan to sell the asset (or disposal group) with an active program to locate a buyer, andits sale must be highly probable within one year.

Non-current assets (or disposal group) are classified as held for sale at the lower of its carrying amount and fair value less coststo sell. Non-current assets and the liabilities of a disposal group classified as held for sale are presented separately from otherassets and liabilities in the statement of financial position. Comparative information is not adjusted for the classification of assetsand liabilities held for sale in the latest period presented in the condensed consolidated balance sheet.

Assets held for sale that represent a component of an entity which are a separate major line of business or geographical area ofoperations, part of a single co-ordinate plan to dispose of a separate major line of business or geographical area of operationsor, is a subsidiary acquired exclusively with a view to resale are presented as discontinued operations in the condensedconsolidated statement of comprehensive income. Comparative information has been re-presented to distinguish betweencontinuing and discontinued operations.

Classification of assets or a disposal group as held for sale and discontinued operations requires judgment on whether the salewill be highly probable, and whether the sale will be recovered through a sale rather than continuing use of the assets.


4. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS IN APPLYINGACCOUNTING POLICIES

The preparation of the condensed consolidated financial statements requires management to make judgments, estimates andassumptions that affect the amounts reported. Management bases its judgments and estimates on historical experience andother factors it believes to be reasonable under the circumstances, but which are inherently uncertain and unpredictable, theresult of which forms the basis of the carrying amounts of assets and liabilities. However, uncertainty about these assumptionsand estimates could result in outcomes that could require a material adjustment to the carrying amount of the affected asset orliability in the future. The critical accounting judgments, estimates and assumptions applied during the quarter are consistentwith those set out in Note 4 to the Trust's audited annual consolidated financial statements for the year ended December 31,2018.

5. ADOPTION OF ACCOUNTING STANDARDS

CURRENT ACCOUNTING POLICY CHANGESThe Trust has adopted the following revised standards, along with any consequential amendments, effective January 1, 2019.

LEASESIFRS 16, "Leases" ("IFRS 16"), sets out the principles for the recognition, measurement and disclosure of leases. IFRS 16 providesrevised guidance on identifying a lease and for separating lease and non-lease components of a contract.

Effective January 1, 2019, the Trust has applied IFRS 16, a single accounting model for most leases that requires a lessee torecognize right-of-use assets and lease liabilities for leases. Under IFRS 16, lessor accounting for operating and finance leases willremain substantially unchanged. The Trust performed an in-depth assessment of its various segments and contracts to identifylease arrangements impacted by IFRS 16. The Trust has elected to apply the modified retrospective approach with the cumulativeeffect of initially applying the standard recognized at the date of initial application in accordance with transitional provisions.Therefore, the comparative information has not been restated and application of the standard will result in the calculation of thelease liability by discounting the remaining rental payments at the lessee’s incremental borrowing rate at January 1, 2019, thedate of transition. As a result of its assessment, the Trust identified various land and rooftop leases within its renewable portfolioand the Trust recognized a right-of-use asset and a corresponding lease liability for $12,036 in the condensed consolidatedstatement of financial position as at January 1, 2019.

Operating lease commitments disclosed as at December 31, 2018 $ 18,358Non-lease commitments disclosed as at December 31, 2018 1,051Total operating commitments disclosed as at December 31, 2018 $ 19,409Discounted using the lessee's incremental borrowing rate as of the date of initial application (5,247)Less: short-term and low value leases recognized on a straight-line basis as an expense —Less: non-lease commitments (1,051)Less: adjustments as a result of a different treatment of extension and termination options (1,075)Lease liability recognized as at January 1, 2019 $ 12,036

Of which are due in: 2019 $ 462 2020 475 2021 487 2022 502 2023 515 2024+ 9,595

$ 12,036

INCOME TAXESIFRIC 23, "Uncertainty over Income Tax Treatments" ("IFRIC 23"), clarifies the application of the recognition and measurementrequirements in IAS 12, "Income Taxes" ("IAS 12"), for situations where there is uncertainty over income tax treatments. IFRIC23 specifically addresses whether an entity considers income tax treatments separately; assumptions that an entity makesregarding the examination of tax treatments by taxation authorities; how an entity determines taxable income or loss, tax bases,unused tax losses or credits, and tax rates; and how an entity considers changes in facts and circumstances. IFRIC 23 does notapply to taxes or levies outside the scope of IAS 12. This amendment did not have an impact on the Trust's condensed consolidatedfinancial statements.


6. DISCONTINUED OPERATIONS

As at June 30, 2019, the Trust had committed to a plan to sell its renewable power portfolio and the operations of the renewablepower segment were classified as discontinued operations. The results of the renewable power portfolio are presented below.

Assets Held for Sale

As atJune 30,2019 (1)

ASSETSTotal non-current assets $ 141,027Total current assets 7,111TOTAL ASSETS $ 148,138

(1) Included in this balance is $139,278 of renewable power assets. Refer to Note 10 for details.

Liabilities Related to Assets Held for Sale

As atJune 30,2019 (2)

Total non-current liabilities $ 67,896Total current liabilities 17,753TOTAL LIABILITIES $ 85,649NET ASSETS $ 62,489

(2) Included in this balance is $83,196 of debt and lease liability associated with the right-of-use asset.

Upon adoption of IFRS 16, the Trust recognized a right-of-use asset with a corresponding lease liability related to various landand rooftop leases. Lease liabilities represent discounted future lease payments for land and rooftop leases within the renewablepower portfolio recognized in accordance with IFRS 16. See Note 5 - Adoption of Accounting Standards.

Maturity analysis - undiscounted cash flows

As atJune 30,

2019

Less than one year $ 965One to five years 4,052More than five years 11,772Total undiscounted lease obligations as at June 30, 2019 $ 16,789Discounted using the lessee's incremental borrowing rate (5,184)Total discounted lease liability as at June 30, 2019 $ 11,605Current portion of the lease obligation 495Non-current portion of the lease obligation 11,110Total lease obligation $ 11,605

SOLAR POWER PROJECTS AND NON-CONTROLLING INTERESTSThe non-controlling partners in the Trust's rooftop solar power projects are arm's length third parties. The aggregate non-controlling interests of all rooftop solar power projects of $5 (December 31, 2018 – $23) are recorded in the condensedconsolidated statements of financial position.

WIND POWER PROJECTS AND NON-CONTROLLING INTERESTSThe Trust, indirectly through a subsidiary, has an 80% economic interest in the wind power portfolio in the province of NovaScotia with an installed capacity of 13.2 MW (10.6 MW at the Trust's share) and also has control over the project’s general partner.The Trust's non-controlling partner’s 20% economic interest in the Nova Scotia wind power project is owned by an arm's lengththird party and its non-controlling interest is reflected on the condensed consolidated statements of financial position in theamount of $1,362 (December 31, 2018 – $1,646).

The operating results of the renewable power segment are subject to seasonal variations with solar irradiation highest duringthe summer months and wind production generally best during the winter months. A summary of the renewable power -discontinued operations results is as follows:



Total income $ 4,930 $ 5,405 $ 9,252 $ 9,669Operating expenses (1,359) (2,512) (3,898) (4,965)Interest expense (1,029) (928) (2,056) (1,853)Net income (loss) from discontinued operations before income tax recovery 2,542 1,965 3,298 2,851

Income tax recovery (expense) from discontinued operations - current (3) (4) (4) (4)Income tax recovery (expense) from discontinued operations - deferred 2,054 (492) 1,839 (678)Net income (loss) from discontinued operations 4,593 1,469 5,133 2,169

Unrealized foreign currency translation gain (loss) related to discontinuedoperations (788) (794) (806) 419

Total other comprehensive income (loss) from discontinued operations $ 3,805 $ 675 $ 4,327 $ 2,588

The renewable power segment includes operations in foreign jurisdictions. During the three and six months ended June 30, 2019,total income of $707 and $1,529 (June 30, 2018 - $527 and $1,315) was attributed to operations in foreign jurisdictions, and asat June 30, 2019, non-current assets of $18,516 (December 31, 2018 - $19,724) were attributed to operations in foreignjurisdictions. During the three and six months ended June 30, 2019, the Trust recorded $2,153 and $3,630 (June 30, 2018 - $2,793and $4,252), respectively, from an electric transmission and distribution company in the renewable power portfolio.


Cash generated from (utilized in) operating activities $ 2,160 $ 3,761 $ 3,447 $ 5,875Cash generated from (utilized in) investing activities — (299) — (601)Cash generated from (utilized in) financing activities (1,545) (2,990) (4,739) (5,252)Net increase (decrease) in cash generated from discontinued operations $ 615 $ 472 $ (1,292) $ 22


7. DEVELOPMENT AND INVESTMENT HOLDINGS

The table below provides a continuity of development and investment holdings:

FVTPL AFS⁽¹⁾

Totalinvestment

holdingsDevelopment

holdings

Totaldevelopment

and investment holdings

Balance as at January 1, 2018 $ 3,652 $ 14,799 $ 18,451 $ 72,155 $ 90,606Reclassification on the adoption of IFRS 9⁽¹⁾ 14,799 (14,799) — — —Acquisitions 37,926 — 37,926 — 37,926Distributions/capital repayment (4,886) — (4,886) (3,060) (7,946)Fair value adjustments 2,353 — 2,353 (4,330) (1,977)Balance as at December 31, 2018 $ 53,844 $ — $ 53,844 $ 64,765 $ 118,609Advances — — — 2,750 2,750Distributions/capital repayment — — — (1,238) (1,238)Dispositions (10,307) — (10,307) — (10,307)Fair value adjustments (4,906) — (4,906) 342 (4,564)Balance as at June 30, 2019 $ 38,631 $ — $ 38,631 $ 66,619 $ 105,250

(1) Upon adoption of IFRS 9, the financial instruments previously recorded as available-for-sale ("AFS") are now classified as Fair Value Through Profit and Loss ("FVTPL").

As at June 30, 2019, investment holdings include a hospitality asset and a retail asset within one of the limited partnerships thatare recorded as FVTPL. Development holdings, also recorded through FVTPL, includes two long-term participating loans securedby real property comprised of two residential assets under development.

During the three and six months ended June 30, 2019, the Trust sold certain components of its retail properties within investmentholdings for cash proceeds of $10,307 and recognized a fair value loss of $3,296.

During the three and six months ended June 30, 2019, the Trust recorded a net fair value loss of $4,097 and $4,906, respectively,primarily related to the sale of its investment holdings and foreign currency translation on its hospitality asset.

The fair value methodologies applied have been consistent with the prior period. For development and investment holdingsrecently acquired, or where certain bids have been obtained, the fair value is based on the purchase or bid price. The fair valuemethodologies and material assumptions for each respective category, other than the above noted, are summarized in the tablebelow:

As atJune 30,

2019December 31,

2018

Method Unobservable inputs Range RangeDevelopment HoldingsResidential assets underdevelopment

Discount future anticipated proceeds from unit closings Discount rates 7.0% - 8.0% 7.0% - 8.0%

Investment HoldingsLimited Partnerships Calculate value by applying direct capitalization method to stabilized

NOI and where applicable discount back to the reporting dateCapitalization rates - 6.2% - 7.0%

Generally, an increase in anticipated proceeds from unit closings or an increase in stabilized NOI will result in an increase in fairvalues. An increase in the capitalization rates ("cap rate") or in the discount rates will result in a decrease in fair values.

If the discount rates applied for residential assets under development were to increase by 1%, the fair value of the residentialassets under development would decrease by $400. If the discount rate were to decrease by 1%, the fair value would increaseby $400.


8. LENDING PORTFOLIO

For the periods endedJune 30,

2019December 31,

2018

Balance, beginning of period $ 144,095 $ 161,432Add (Deduct):

Lending portfolio advances 59 35,042Changes in accrued interest balance 464 (776)Interest capitalized to lending portfolio balance 3,586 6,113Premium (discount) on lending portfolio, net of amortization 363 (3,546)Lender fees and extension fees received, net of amortization 225 318Principal repayments at maturity, contractual repayments and prepayments (3,500) (54,488)

Balance, end of period⁽¹⁾ $ 145,292 $ 144,095Less: current portion 95,881 96,968Non-current portion of lending portfolio $ 49,411 $ 47,127

(1) Lending portfolio balance includes a loan of $17,468 (December 31, 2018 - $16,574) that is classified as FVTPL.

The table below provides a summary of the Trust's lending portfolio:

As atJune 30,

2019December 31,

2018

Weighted average interest rate (period-end) 9.7% 9.6%Security allocation (1st mortgages/other) 71.3% / 28.7% 69.8% / 30.2%Maturity dates 2019 - 2025 2019 - 2025Balance of accrued interest $ 706 $ 241Loans with prepayment options 34,918 37,127

During the six months ended June 30, 2019, a loan investment classified as FVTPL, aggregating $17,468, was measured at fairvalue using a discounted cash flow method. The fair value was determined by discounting the expected cash flows of the loanusing an interest rate of 17.5% which took into consideration similar instruments with corresponding maturity dates plus a creditadjustment in accordance with the borrowers' creditworthiness, as well as the risk profile of the underlying security. Generally,under this method, a decrease in the market rate will result in an increase to the fair value and an increase in the market ratewill result in a decrease to the fair value. If the weighted average market rate were to increase by 25 bps, the fair value of theloan investments would decrease by $100. If the weighted average market rate were to decrease by 25 bps, the fair value wouldincrease by $100.

9. INCOME PROPERTIES

For the period ended NoteJune 30,

2019December 31,

2018

Balance, beginning of period $ 224,310 $ 219,656Add (Deduct): Building improvements 2,074 1,250 Lease incentives and initial direct leasing costs 960 6,859 Amortization of lease incentives (766) (1,260) Fair value adjustments to income properties 261 (2,195)Balance, end of period $ 226,839 $ 224,310Change in unrealized losses included in net income for the period

Change in fair value of income properties $ 261 $ (2,195)

As at June 30, 2019, the Trust’s income properties consisted of interests in office and industrial properties co-owned with DreamOffice Real Estate Investment Trust ("Dream Office REIT") and Dream Industrial Real Estate Investment Trust ("Dream IndustrialREIT"), respectively, which are accounted for as joint operations, and three wholly owned office properties.

During the three and six months ended June 30, 2019, the Trust recorded a fair value gain of $261 on the condensed consolidatedstatement of comprehensive income (loss) on the Trust's income properties. Income properties, excluding AHFS and certainproperties where binding bids are received, are measured at fair value using the income approach, which is derived from theoverall capitalization rate method or discounted cash flow method. The Trust determines the fair value of income propertiesclassified as AHFS by considering the current contracted sale prices, as management has committed to a plan of sale of theunderlying properties and the sale of the properties is considered highly probable. The fair values of income properties weredetermined by using cap rates of 4.3% to 7.5% (December 31, 2018 – 4.3% to 7.5%), resulting in a weighted average cap rate of5.9% (December 31, 2018 – 5.9%) and discount rates of 5.8% to 8.8% (December 31, 2018 – 5.8% to 8.8%).

Generally, under the overall cap rate method, an increase in stabilized NOI will result in an increase to the fair value. An increasein the cap rate will result in a decrease to the fair value. The cap rate magnifies the effect of a change in stabilized NOI. If theweighted average cap rate were to increase by 25 bps, the fair value of income properties would decrease by $10,000. If theweighted average cap rate were to decrease by 25 bps, the fair value would increase by $10,000.

As at June 30, 2019, all of the income properties, with a fair value of $226,839 (December 31, 2018 – $224,310), were pledgedas security for mortgages.


10. RENEWABLE POWER ASSETS

The table below provides a continuity of renewable power assets:

Note Right-of-use Solar power Wind power Total

Balance as at January 1, 2018 $ — $ 83,381 $ 52,133 $ 135,514Additions to renewable power assets during the period — 312 277 589Depreciation of renewable power assets — (3,530) (2,476) (6,006)Foreign currency gain — — 518 518Balance as at December 31, 2018 $ — $ 80,163 $ 50,452 $ 130,615Right-of-use asset recognized on the adoption of IFRS 16⁽¹⁾ 12,036 — — 12,036Additions (dispositions) to renewable power assets during the period — (41) — (41)Depreciation of renewable power assets (236) (1,198) (844) (2,278)Foreign currency loss (219) — (835) (1,054)Transfers to assets held for sale 6 (11,581) (78,924) (48,773) (139,278)Balance as at June 30, 2019 $ — $ — $ — $ —

(1) Upon adoption of IFRS 16, the trust has recognized right-of-use assets for leases with terms more than 12 months. Refer to Note 5 - Adoption of Accountingstandards.

As atJune 30,

2019December 31,

2018

Gross book value $ 158,248 $ 147,307Accumulated depreciation (18,970) (16,692)Transfers to assets held for sale (139,278) —Total renewable power assets $ — $ 130,615

During the three and six months ended June 30, 2019, the Trust classified its renewable power assets as assets held for sale. Forfurther details refer to Note 6 - Discontinued Operations.


11. EQUITY ACCOUNTED INVESTMENTS

The Trust participates in various partnerships with other parties for the purpose of investing in various residential and mixed-useinvestment property developments, which are accounted for using the equity investment method. These partnerships are eitherconsidered joint ventures or investments in associates. A joint venture is an arrangement entered into in the form of jointlycontrolled entities whereby the parties have joint control and have rights to the net assets of the arrangement. Investments inassociates are those in which the Trust has significant influence over the arrangement. As at June 30, 2019, the carrying value ofthese arrangements was $156,696 (December 31, 2018 - $132,528).

During the three and six months ended June 30, 2019, Axis Condominiums development commenced occupancy which resultedin $10,343 of income recorded at the Trust's share as well as the receipt of a cash advance for $10,608.

During the six months ended June 30, 2019, the Trust, along with DAM, acquired the remaining 50% of an existing equitypartnership formed for the development of a residential property located in downtown Toronto, Ontario. The Trust, along withDAM, invested $4,458 for the additional 50% in the development investment resulting in the Trust owning a 75% interest andDAM owning the remainder. The project is managed by DAM. The investment is considered to be a joint venture and the equitymethod of accounting continued to be applied.

During the six months ended June 30, 2019, the Trust, along with DAM, increased its interest in a retail shopping centre andresidential mixed use development investment opportunity located in 100 Steeles Ave. West in Toronto, Ontario ("100 Steeles")to 50%. The Trust invested $2,524 for an additional interest in the investment resulting in the Trust increasing its ownership to37.5% in 100 Steeles, with DAM owning the remaining 12.5%. Given the ownership percentage and the ability to exercise significantinfluence pursuant to the partnership agreements, the Trust is considered to have significant influence over this investment, andaccordingly, the equity method of accounting continued to be applied.

Each equity accounted investment is subject to a shareholder or limited partnership agreement that governs distributions fromthese investments. In addition, distributions must also comply with the respective credit agreements.

The following tables summarize the Trust's proportionate share of the net assets of the equity accounted investments:

As at June 30, 2019 Ownership interest Net assetsFrank Gehry 18.75% $ 23,381Brightwater⁽¹⁾ 23.25% 34,701Zibi 40.00% 43,626Lakeshore East 37.50% 13,434West Don Lands 25.00% 2,629100 Steeles 37.50% 8,105Axis Condominiums 28.00%⁽²⁾ 12,402Other⁽³⁾ 7.00% - 75.00% 18,418Total $ 156,696

(1) Formerly known as Port Credit Development.(2) Effective economic interest of 14.7% based on milestone achieved per partnership agreement.(3) Other equity accounted investments includes IVY Condominiums, Plaza Bathurst, Plaza Imperial, Seaton development and Queen & Mutual.

As at December 31, 2018 Ownership interest Net assetsFrank Gehry 18.75% $ 22,130Brightwater⁽¹⁾ 23.25% 32,828Zibi 40.00% 38,398Lakeshore East 37.50% 12,871West Don Lands 25.00% 1,946100 Steeles 25.00% 6,119Axis Condominiums 28.00% 2,012Other⁽²⁾ 7.00% - 50.00% 16,224Total $ 132,528

(1) Formerly known as Port Credit Development.(2) Other equity accounted investments includes IVY Condominiums, Plaza Bathurst, Plaza Imperial, Seaton development and Queen & Mutual.

The following tables summarize the Trust's proportionate share of revenue and net income (loss) in equity accounted investments:

For the three months ended June 30, 2019 Ownership interest RevenueNet income

(loss)

Frank Gehry 18.75% $ 93 $ (71)Brightwater⁽¹⁾ 23.25% 6 (17)Zibi 40.00% 1,340 11Lakeshore East 37.50% 37 21West Don Lands 25.00% 55 38100 Steeles 37.50% 153 (175)Axis Condominiums 28.00%⁽²⁾ 26,218 10,343Other⁽³⁾ 7.00% - 75.00% 38 (84)Total $ 27,940 $ 10,066


For the three months ended June 30, 2018 Ownership interest RevenueNet income

(loss)

Frank Gehry 18.75% $ 379 $ 224Brightwater⁽¹⁾ 23.25% — 18Zibi 40.00% 108 (158)Lakeshore East 37.50% 8 (37)West Don Lands 25.00% — (72)100 Steeles 25.00% 165 35Axis Condominiums 28.00% — 13Other⁽²⁾ 7.00% - 50.00% 168 (199)Total $ 828 $ (176)

(1) Formerly known as Port Credit Development.(2) Other equity accounted investments includes IVY Condominiums, Plaza Bathurst, Plaza Imperial and Seaton development.

For the six months ended June 30, 2019 Ownership interest RevenueNet income

(loss)

Frank Gehry 18.75% $ 187 $ (142)Brightwater⁽¹⁾ 23.25% 6 (22)Zibi 40.00% 1,471 (15)Lakeshore East 37.50% 72 44West Don Lands 25.00% 105 66100 Steeles 37.50% 394 (530)Axis Condominiums 28.00%⁽²⁾ 26,218 10,343Other⁽³⁾ 7.00% - 75.00% 387 (122)Total $ 28,840 $ 9,622


For the six months ended June 30, 2018 Ownership interest RevenueNet income

(loss)

Frank Gehry 18.75% $ 681 $ 369Brightwater⁽¹⁾ 23.25% — (2)Zibi 40.00% 137 (357)Lakeshore East 37.50% 15 (63)West Don Lands 25.00% — (72)100 Steeles 25.00% 165 35Axis Condominiums 28.00% — —Other⁽²⁾ 7.00% - 50.00% 335 (203)Total $ 1,333 $ (293)

(1) Formerly known as Port Credit Development.(2) Other equity accounted investments includes IVY Condominiums, Plaza Bathurst, Plaza Imperial and Seaton development.


12. DEBT

As atJune 30,

2019December 31,

2018

Mortgages payable $ 122,138 $ 122,684Term loans — 75,970Total debt before undernoted $ 122,138 $ 198,654Unamortized balance of deferred financing costs (360) (3,162)Total $ 121,778 $ 195,492Less: current portion 29,858 32,646Total non-current long-term debt $ 91,920 $ 162,846

MORTGAGES PAYABLE Mortgages payable are secured by charges on specific income properties, bear interest at a weighted average face rate of 3.7%(December 31, 2018 – 3.5%) and mature between 2019 and 2022. The weighted average effective interest rate of mortgagespayable is 3.7% at June 30, 2019 (December 31, 2018 – 3.5%). During the six months ended June 30, 2019, there were no lumpsum repayments of mortgages payable.

TERM LOANS AND RESTRICTED CASHAs at June 30, 2019, term loans of $74,204 net of deferred financing fees of $2,613 were reclassified to liabilities related to assetsheld for sale. As at June 30, 2019, restricted cash and the balance of available funds held in escrow under the term loans was$692 and was reclassified to liabilities related to assets held for sale.

As at December 31, 2018, term loans were $75,970 net of deferred financing fees of $2,692. As at December 31, 2018, restrictedcash and the balance of available funds held in escrow under the term loans was $3,555.

For the three and six months ended June 30, 2019, lump sum and regular long-term debt principal repayments were $1,727 and$2,312, respectively, including liabilities related to assets held for sale of $1,455 and $1,765. Total lump sum and regular long-term debt principal repayments for the three and six months ended June 30, 2018 were $1,680 and $2,250.

REVOLVING CREDIT FACILITYA demand revolving credit facility (the "facility") is available to the Trust up to a formula-based maximum not to exceed $50,000.The available credit under the facility, as determined by the formula, was $38,916 as at June 30, 2019 (December 31, 2018 -$39,395). The facility is in the form of rolling one-month BA rates and bears interest at the BA rate plus 2.0%, or at the bank’sprime rate plus 1.0% (3.95% as at June 30, 2019, 3.95% as at December 31, 2018), payable monthly. The facility is secured by ageneral security agreement over all assets of Dream Alternatives Lending Services LP and Dream Alternatives Master LP, whichare subsidiaries of the Trust. As at June 30, 2019, no funds were drawn on the revolving credit facility (December 31, 2018 – $nil)and funds available under this facility were $35,319 (December 31, 2018 –$38,000), as determined by the formula-basedmaximum calculation, net of $3,597 (December 31, 2018 – $1,395) of letters of credit issued against the facility. Subsequent toJune 30, 2019, the facility was renewed with certain financial covenants requirements amended and the maturity date extendedto July 31, 2021.

FINANCIAL COVENANTSThe revolving credit facility, the financial guarantees, certain mortgages on income properties and the renewable power termloans contain financial covenants that require the Trust to meet certain financial ratios and financial condition tests. A failure tomeet these tests could result in default and, if not cured or waived, could result in an acceleration of the repayment in theunderlying financing. As at June 30, 2019, the Trust was in compliance with these financial covenants.


13. AMOUNTS PAYABLE AND ACCRUED LIABILITIES

As atJune 30,

2019December 31,

2018

Accrued liabilities and other payables $ 22,675 $ 15,820Other liabilities 3,128 3,613Distributions payable 2,401 2,420Accrued interest 179 188Rent received in advance 1,797 1,681Total $ 30,180 $ 23,722

Other liabilities include payables related to future capital commitments on certain development projects. As at June 30, 2019,amounts payable and accrued liabilities of $14,058 were reclassified to liabilities related to assets held for sale.


14. UNITHOLDERS’ EQUITY

DREAM ALTERNATIVES UNITSDream Alternatives is authorized to issue an unlimited number of units and an unlimited number of Special Trust Units ("STUs").Each unit represents an undivided beneficial interest in the Trust. Each unit is transferable and entitles the holder thereof to:

• an equal participation in distributions of the Trust;• rights of redemption; and• one vote at meetings of unitholders.

The STUs may only be issued to holders of exchangeable securities and entitle the holder to exchange the exchangeable securitiesfor units. The STUs have a nominal redemption value, entitle the holder to vote at the Trust level and do not receive distributions.At June 30, 2019, there were no STUs issued and outstanding.

DISTRIBUTIONSPursuant to its Declaration of Trust, Dream Alternatives expects to maintain monthly distribution payments to unitholders payableon or about the 15th day of the following month. The amount of the annualized distribution to be paid is determined by theTrustees, at their sole discretion, based on what they consider appropriate given the circumstances of the Trust. The Trusteesmay declare distributions out of the income, net realized capital gains and capital of the Trust to the extent such amounts havenot already been paid, allocated or distributed. The following table provides details of the distribution payments:


Paid in cash $ 7,207 $ 4,976 $ 12,768 $ 10,433Paid by way of reinvestment in units — 2,347 1,779 4,199Payable at beginning of period (2,405) (2,414) (2,420) (2,414)Payable at end of period 2,401 2,410 2,401 2,410Total $ 7,203 $ 7,319 $ 14,528 $ 14,628

On June 19, 2019, the Trust announced a cash distribution of $0.033 per unit for the month of June 2019. The monthly distributionfor June 2019 was paid on July 15, 2019. On July 22, 2019, the Trust announced a cash distribution of $0.033 per unit for themonth of July 2019, which will be paid on August 15, 2019 to unitholders of record as at July 31, 2019.

DISTRIBUTION REINVESTMENT AND UNIT PURCHASE PLANThe Distribution Reinvestment and Unit Purchase Plan ("DRIP") allowed holders of units, other than unitholders who are residentof or present in the United States, to elect to have all cash distributions from Dream Alternatives reinvested in additional units.Unitholders who participated in the DRIP received an additional distribution of units equal to 4% of each cash distribution thatwas reinvested.

On February 20, 2019, the Trust announced the suspension of its DRIP until further notice effective for the February 2019distribution.

NORMAL COURSE ISSUER BIDThe Trust received acceptance of its Notice of Intention to renew its prior normal course issuer bid (the "bid") from the TSX onJanuary 11, 2019. The bid commenced on January 15, 2019 and will remain in effect until the earlier of January 14, 2020 or thedate on which the Trust has purchased the maximum number of units permitted under the bid. Under the bid the Trust has theability to purchase for cancellation up to a maximum of 6,066,081 units (representing 10% of the Trust’s public float of 60,660,817units at the time of entering the bid through the facilities of the TSX).

During the six months ended June 30, 2019, the Trust entered into an automatic securities repurchase plan (the "Plan") in orderto facilitate purchases of its units under the bid. The Plan allows for purchases by Dream Alternatives of units at any time including,without limitation, 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 termsof the parties' written agreement. Outside of such restricted or blackout periods, the units may also be purchased in accordancewith management’s discretion. The Plan will terminate on January 14, 2020.

During the three months ended June 30, 2019, the Trust repurchased 111,836 units (three months ended June 30, 2018 - 467,096units) at a total cost of $798 (June 30, 2018 - $3,041). The excess of book value over the purchase price of the units purchasedof $140 (June 30, 2018 – $879) was recorded as a gain directly to retained earnings.

During the six months ended June 30, 2019, the Trust repurchased 876,984 units (six months ended June 30, 2018 – 804,078units) at a total cost of $6,053 (June 30, 2018 – $5,174), inclusive of transaction costs. The excess of book value over the purchaseprice of the units purchased of $1,298 (June 30, 2018 – $1,573) was recorded as a gain directly to retained earnings.

SUBSTANTIAL ISSUER BID Subsequent to the second quarter of 2019, the Trust announced its intention to commence a Substantial Issuer Bid ("SIB") pursuantto which the Trust will offer to purchase from unitholders of the Trust up to four million units at a price of $8.00 per unit. Thisoffer commenced on July 24, 2019 and will expire on August 29, 2019.


15. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Unamortized realized fairvalue gain (loss) from

derivative financial liabilityhedge, net of tax

Fair value adjustments toand realized fair value

losses from available-for-sale investments, net of tax

Unrealized foreigncurrency translation gain

(loss) Total

Balance as at January 1, 2018 $ (1,810) $ 295 $ (2,735) $ (4,250)Other comprehensive gain during the year — — 467 467Realized fair value gain 99 — — 99Reclassification on adoption of IFRS 9⁽¹⁾ — (295) — (295)Balance as at December 31, 2018 $ (1,711) $ — $ (2,268) $ (3,979)Other comprehensive gain (loss) during the periodfrom discontinued operations — — (806) (806)

Realized fair value gain 53 — — 53Balance as at June 30, 2019 $ (1,658) $ — $ (3,074) $ (4,732)

(1) As at December 31, 2018, upon the adoption of IFRS 9, the Trust reclassified $295, net of tax, of unrealized fair value adjustments from AFS investments previouslyreflected in OCI, as an opening retained earnings adjustment.

As at June 30, 2019, the realized fair value gain from the derivative financial liability hedge are net of income taxes of $14(December 31, 2018 – net of income taxes of $623).

16. INCOME PROPERTIES REVENUE Three months ended June 30, Six months ended June 30,

2019 2018 2019 2018Rental revenue $ 3,376 $ 3,305 $ 6,802 $ 6,765CAM and parking services revenue 2,482 2,474 5,080 4,876Total $ 5,858 $ 5,779 $ 11,882 $ 11,641

17. INTEREST EXPENSEThree months ended June 30, Six months ended June 30,

2019 2018 2019 2018Interest expense incurred, at contractual rate of debt and other bank charges $ 1,205 $ 1,404 $ 2,430 $ 2,526Amortization of deferred financing costs 55 55 111 111Total $ 1,260 $ 1,459 $ 2,541 $ 2,637


18. GENERAL AND ADMINISTRATIVE EXPENSESThree months ended June 30, Six months ended June 30,

2019 2018 2019 2018Salary and other compensation $ 809 $ 704 $ 1,765 $ 1,190Trust, service and professional fees 1,498 503 1,914 982General office and other 104 164 175 277Asset management and other third-party service fees 1,739 2,509 4,490 5,181Total $ 4,150 $ 3,880 $ 8,344 $ 7,630

19. INCOME TAXES

During the three and six months ended June 30, 2019, the Trust recognized an income tax expense of $1,211 and $1,885,respectively (income tax recovery for the three and six months ended June 30, 2018 – $469 and $285).


2019 2018 2019 2018

Current income tax recovery (expense): Current income taxes with respect to profits in the period $ — $ — $ — $ —Current income tax recovery (expense): $ — $ — $ — $ —Deferred income tax recovery (expense): (Origination) and reversal of temporary differences (3,249) 992 (3,746) 503 Deferred tax adjustments in respect of prior periods — — — 487 Impact of changes in income tax rates (13) (27) 26 (23) Deferred income tax recovery (expense) $ (3,262) $ 965 $ (3,720) $ 967Total income tax recovery (expense) from continuing operations $ (3,262) $ 965 $ (3,720) $ 967

Total income tax recovery (expense) from discontinued operations $ 2,051 $ (496) $ 1,835 $ (682)Income tax recovery (expense) $ (1,211) $ 469 $ (1,885) $ 285

The income tax expense amount on pre-tax earnings differs from the income tax expense amount that would arise using thecombined Canadian federal and provincial statutory tax rate of 26.8% for the six months ended June 30, 2019 (June 30, 2018 –26.8%) as illustrated in the table below:


2019 2018 2019 2018

Earnings (loss) before income tax expense for the period $ 7,508 $ (2,319) $ 8,140 $ 2,763

Combined federal and provincial tax rate 26.8% 26.6% 26.8% 26.8%

Income tax recovery (expense) before the undernoted $ (2,012) $ 617 $ (2,182) $ (740)

Effect on taxes of:

Adjustment in expected future tax rates (13) (27) 26 (23)

Non-deductible expenses (70) (77) (218) (138)

Non-taxable revenues — 290 — 1,216

Difference between Canadian rates and rates in foreign jurisdiction (6) 38 (13) 38

Tax adjustments in respect of prior years — — — 487

Rate differences (1,159) 137 (1,331) 160

Other items (2) (13) (2) (33)

Total income tax recovery (expense) $ (3,262) $ 965 $ (3,720) $ 967

The movement in the deferred income tax assets and liabilities during the six months ended June 30, 2019 and the net componentsof the Trust’s net deferred income tax asset are illustrated in the following table:

Incomeproperties

Renewablepower

Lendingportfolio

Developmentand

investmentholdings Other Hedge

Loss carry-forward Total

Balance as at January 1, 2018 $ (3,310) $ (2,893) $ 986 $ (3,462) $ 209 $ 659 $ 8,863 $ 1,052(Charged) credited to: (Loss) earnings for the year (251) (894) (235) 2,996 (1,198) — (1,111) (693) Other comprehensive income — — — — — (36) — (36)Balance as at December 31, 2018 $ (3,561) $ (3,787) $ 751 $ (466) $ (989) $ 623 $ 7,752 $ 323(Charged) credited to: (Loss) earnings for the year (737) 1,832 (551) 2,557 580 — (5,562) (1,881) Other comprehensive (income) loss — — — — — (14) — (14)Balance as at June 30, 2019 $ (4,298) $ (1,955) $ 200 $ 2,091 $ (409) $ 609 $ 2,190 $ (1,572)


20. SEGMENTED INFORMATION

The Trust has identified its reportable operating segments as development and investment holdings, lending portfolio, and incomeproperties based on how the chief operating decision-maker views the financial results of the business. As at June 30, 2019, theTrust's renewable power segment is classified as discontinued operations. For further details refer to Note 6 "DiscontinuedOperations". For the three and six months ended June 30, 2019 and June 30, 2018, a majority of income tax (expense) recoveries and generaland administrative expenses were not allocated to the segment expenses as these costs are not specifically managed on asegmented basis.

SEGMENTED RESULTS OF OPERATIONS – THREE MONTHS ENDED JUNE 30, 2019

Developmentand

investmentholdings

Lendingportfolio

Incomeproperties Other⁽¹⁾ Total

INCOMEFair value adjustments and operating cash distributions in development andinvestment holdings $ (3,947) $ — $ — $ — $ (3,947)

Lending portfolio interest income and lender fees — 3,726 — — 3,726Income properties revenue — — 5,858 — 5,858

Share of income (loss) from equity accounted investments 10,066 — — — 10,066TOTAL INCOME 6,119 3,726 5,858 — 15,703

EXPENSESIncome properties, operating — — (3,047) — (3,047)Interest expense — — (1,171) (89) (1,260)General and administrative — — — (4,150) (4,150)TOTAL EXPENSES — — (4,218) (4,239) (8,457)

Fair value adjustments to income properties — — 261 — 261OPERATING INCOME (LOSS) 6,119 3,726 1,901 (4,239) 7,507

Interest and other income 337 — 4 105 446Transaction costs — (4) (327) (114) (445)EARNINGS (LOSS) BEFORE INCOME TAX RECOVERY (EXPENSE) 6,456 3,722 1,578 (4,248) 7,508

INCOME TAX RECOVERY (EXPENSE)Current income tax recovery (expense) — — — — —Deferred income tax recovery (expense) — — — (3,262) (3,262)TOTAL INCOME TAX RECOVERY (EXPENSE) — — — (3,262) (3,262)

NET INCOME (LOSS) FROM CONTINUING OPERATIONS 6,456 3,722 1,578 (7,510) 4,246

OTHER COMPREHENSIVE INCOME (LOSS)

Items that will be reclassified subsequently to net income (loss):Realized fair value gain from derivative financial liability hedge, net of tax — — — 23 23TOTAL COMPREHENSIVE INCOME (LOSS) FROM CONTINUING OPERATIONS $ 6,456 $ 3,722 $ 1,578 $ (7,487) $ 4,269



SEGMENTED RESULTS OF OPERATIONS – THREE MONTHS ENDED JUNE 30, 2018

Developmentand

investmentholdings

Lendingportfolio



Lending portfolio interest income and lender fees — 4,174 — — 4,174Income properties revenue — — 5,779 — 5,779Share of income (loss) from equity accounted investments (176) — — — (176)TOTAL INCOME (LOSS) (5,162) 4,174 5,779 — 4,791


Fair value adjustments to income properties — — (114) — (114)OPERATING INCOME (LOSS) (5,162) 4,174 1,537 (4,280) (3,731)

Interest and other income 338 — 384 135 857Transaction costs — (72) 12 — (60)Fair value adjustments to marketable securities — — 658 (43) 615EARNINGS (LOSS) BEFORE INCOME TAX RECOVERY (EXPENSE) (4,824) 4,102 2,591 (4,188) (2,319)

INCOME TAX RECOVERY (EXPENSE)Current income tax recovery (expense) — — — — —Deferred income tax recovery (expense) — — — 965 965TOTAL INCOME TAX RECOVERY (EXPENSE) — — — 965 965

NET INCOME (LOSS) FROM CONTINUING OPERATIONS (4,824) 4,102 2,591 (3,223) (1,354)

OTHER COMPREHENSIVE INCOME (LOSS)

Items that will be reclassified subsequently to net income (loss):Realized fair value gain from derivative financial liability hedge, net of tax — — — 24 24TOTAL COMPREHENSIVE INCOME (LOSS) FROM CONTINUING OPERATIONS $ (4,824) $ 4,102 $ 2,591 $ (3,199) $ (1,330)



SEGMENTED RESULTS OF OPERATIONS – SIX MONTHS ENDED JUNE 30, 2019

Developmentand

investmentholdings

Lendingportfolio



Lending portfolio interest income and lender fees — 7,262 — — 7,262Income properties revenue — — 11,882 — 11,882Share of income (loss) from equity accounted investments 9,622 — 9,622TOTAL INCOME 5,332 7,262 11,882 — 24,476


Fair value adjustments to income properties — — 261 — 261OPERATING INCOME (LOSS) 5,332 7,262 3,409 (8,519) 7,484

Interest and other income 675 — 9 402 1,086Transaction costs — (7) (309) (114) (430)EARNINGS (LOSS) BEFORE INCOME TAX RECOVERY (EXPENSE) 6,007 7,255 3,109 (8,231) 8,140

INCOME TAX RECOVERY (EXPENSE)Current income tax recovery (expense) — — — — —Deferred income tax recovery (expense) — — — (3,720) (3,720)TOTAL INCOME TAX RECOVERY (EXPENSE) — — — (3,720) (3,720)

NET INCOME (LOSS) FROM CONTINUING OPERATIONS 6,007 7,255 3,109 (11,951) 4,420

OTHER COMPREHENSIVE INCOME (LOSS)Items that will be reclassified subsequently to net income (loss):Realized fair value gain from derivative financial liability hedge, net of tax — — — 53 53TOTAL COMPREHENSIVE INCOME (LOSS) FROM CONTINUING OPERATIONS $ 6,007 $ 7,255 $ 3,109 $ (11,898) $ 4,473



SEGMENTED RESULTS OF OPERATIONS – SIX MONTHS ENDED JUNE 30, 2018

Developmentand

investmentholdings

Lendingportfolio



Lending portfolio interest income and lender fees — 7,860 — — 7,860Income properties revenue — — 11,641 — 11,641Share of income (loss) from equity accounted investments (293) — — — (293)TOTAL INCOME (LOSS) (3,355) 7,860 11,641 — 16,146


Fair value adjustments to income properties — — (2,224) — (2,224)OPERATING INCOME (LOSS) (3,355) 7,860 1,067 (8,130) (2,558)

Interest and other income 675 — 1,104 313 2,092Transaction costs — (82) (55) — (137)Fair value gain (loss) from marketable securities — — 3,657 (291) 3,366EARNINGS (LOSS) BEFORE INCOME TAX RECOVERY (EXPENSE) (2,680) 7,778 5,773 (8,108) 2,763

INCOME TAX RECOVERY (EXPENSE)Current income tax recovery (expense) — — — — —Deferred income tax recovery (expense) — — — 967 967TOTAL INCOME TAX RECOVERY (EXPENSE) — — — 967 967

NET INCOME (LOSS) FROM CONTINUING OPERATIONS (2,680) 7,778 5,773 (7,141) 3,730

OTHER COMPREHENSIVE INCOMEItems that will be reclassified subsequently to net income (loss):Realized fair value gain from derivative financial liability hedge, net of tax — — — 50 50TOTAL COMPREHENSIVE INCOME (LOSS) FROM CONTINUING OPERATIONS $ (2,680) $ 7,778 $ 5,773 $ (7,091) $ 3,780



SEGMENTED ASSETS AND LIABILITIES – AS AT JUNE 30, 2019

As at June 30, 2019

Developmentand

investmentholdings

Lendingportfolio


ASSETSTotal non-current assets $ 266,164 $ 49,411 $ 227,682 $ 131 $ 543,388Total current assets 1,272 95,881 8,589 26,468 132,210TOTAL ASSETS $ 267,436 $ 145,292 $ 236,271 $ 26,599 $ 675,598

LIABILITIESTotal non-current liabilities $ — $ — $ 91,920 $ 4,541 $ 96,461Total current liabilities 10,874 — 40,384 8,781 60,039TOTAL LIABILITIES $ 10,874 $ — $ 132,304 $ 13,322 $ 156,500

(1) Includes the Trust and other segment level cash and net working capital balances.

SEGMENTED ASSETS AND LIABILITIES – AS AT DECEMBER 31, 2018

As at December 31, 2018

Developmentand

investmentholdings

Lendingportfolio


Renewablepower Total

ASSETSTotal non-current assets $ 254,794 $ 47,127 $ 225,076 $ 757 $ 132,251 $ 660,005Total current assets 642 96,968 9,081 36,432 10,179 153,302TOTAL ASSETS $ 255,436 $ 144,095 $ 234,157 $ 37,189 $ 142,430 $ 813,307

LIABILITIESTotal non-current liabilities $ — $ — $ 93,236 $ 2,166 $ 69,610 $ 165,012Total current liabilities 632 1,875 38,959 7,935 6,967 56,368TOTAL LIABILITIES $ 632 $ 1,875 $ 132,195 $ 10,101 $ 76,577 $ 221,380

(1) Includes the Trust and other segment level cash and net working capital balances.


21. RELATED PARTY TRANSACTIONS AND ARRANGEMENTS

From time to time, the Trust and its subsidiaries enter into transactions with related parties that are contracted under commercialterms. On January 1, 2018, Dream acquired control of the Trust, based on Dream's increased exposure to variable returns resultingfrom increased ownership through units held in the Trust and from new real estate joint venture agreements. Dream is theultimate parent company of the Trust. DAM, which is a wholly owned subsidiary of Dream Unlimited Corp. (TSX: DRM), is theTrust’s Asset Manager and is a related party and provides key management personnel services to the Trust under the terms ofthe management agreement.

ASSET MANAGEMENT AGREEMENT

Pursuant to the Management Agreement, the Trust incurred the following amounts:


Fees paid/payable by the Trust under the Management Agreement: Base annual management fee $ 1,679 $ 2,443 $ 4,321 $ 4,838 Acquisition/origination fee and disposition fees 85 78 195 1,149 Expense recoveries relating to financing arrangements and other 607 595 958 1,089Total $ 2,371 $ 3,116 $ 5,474 $ 7,076

During the six months ended June 30, 2019, the acquisition of ownership interest in investments within the development andinvestment holdings portfolio resulted in acquisition fees calculated in accordance with the Management Agreement.

Effective April 1, 2019, the Trust agreed to settle the management fees payable pursuant to the Management Agreement in unitsof the Trust, until December 31, 2020. Subsequent to June 30, 2019, the Trust settled its management fee to DAM with theissuance of 316,747 units.

PROPERTY MANAGEMENT AGREEMENTPursuant to the property management agreements, DOMC and DIMC will perform property management services includingtenant administration, leasing services, accounting, etc., for a fee of 3.5% of income property revenues. The property managementagreement can be terminated upon an unremedied default by the property manager, DOMC or DIMC, or if there is a change inthe ownership of the property.

SERVICE AGREEMENTThe Service Agreement is for a one-year term and will be automatically renewed for further one-year terms unless and until theService Agreement is terminated in accordance with its terms or by mutual agreement of the parties.

FRAMEWORK AGREEMENTDuring the six months ended June 30, 2019, there were no development fees accrued or paid to DAM in accordance with theFramework Agreement.

AMOUNTS DUE TO RELATED PARTIESAmounts payable and accrued liabilities due to DAM at June 30, 2019 were $4,385 (December 31, 2018 - $3,185). Included inthe balance due to DAM is $2,743 (December 31, 2018 - $1,535) related to the Management Agreement, and $1,642(December 31, 2018 - $1,650) relating to a letter of credit to a third party in relation to a co-owned development project.

As at December 31, 2017, the Trust had entered into various project-level development management agreements with DAM,and its third party co-developers where applicable, in which the Trust has equity ownership interests. Pursuant to theseagreements, DAM provides development management services. The corresponding development management fees are sharedamong the partners within each development project. Under these agreements, during the three and six months ended June 30,2019, $149 and $299 of fees were incurred at the project-level, at the Trust's share (three and six months ended June 30, 2018- $611 and $642). As at June 30, 2019, at the Trust's share, $523 was owing to DAM from the projects (December 31, 2018 -$870).

During the three and six months ended June 30, 2019, fees incurred pursuant to the property management agreements were$656 and $1,575, respectively (three and six months ended June 30, 2018 – $722 and $1,516). Amounts payable and accruedliabilities as at June 30, 2019 included $56 (December 31, 2018 – $330), related to these agreements.


For the three and six months ended June 30, 2019, fees incurred pursuant to the Service Agreement were $103 and $197,respectively (three and six months ended June 30, 2018 – $79 and $143). Amounts payable and accrued liabilities as at June 30,2019 included $47 (December 31, 2018 – $34) related to the Service Agreement.

Effective July 7, 2015 and September 5, 2015, a subsidiary of the Trust entered into a leasing agreement with Dream IndustrialManagement LP ("DIMLP"), a wholly owned subsidiary of Dream Industrial REIT to lease roof-top space. During the three and sixmonths ended June 30, 2019 the fees incurred with respect to this leasing agreement were $27 and $54 (three and six monthsended June 30, 2018 - $27 and $54).


22. SUPPLEMENTARY CASH FLOW INFORMATION Amortization and depreciation includes:


Lease incentives $ 383 $ 328 $ 766 $ 523Lender fees (112) (225) (225) (450)Lending portfolio discount (184) (161) (363) (161)Deferred financing costs 94 94 189 189Renewable power assets 581 1,489 2,278 2,977Intangible assets – wind power contract 8 25 32 49Realized fair value loss on derivative financial liability hedge 34 33 67 67Total $ 804 $ 1,583 $ 2,744 $ 3,194

Other adjustments include:


Straight-line rent adjustment $ (31) $ (8) $ (77) $ 49Deferred interest income (750) (3,532) (1,875) (2,092)Share of (income) loss from equity accounted investments (10,066) 176 (9,622) 293Fair value adjustments to development and investment holdings 4,055 5,157 4,564 3,403Fair value adjustments to income properties (261) 114 (261) 2,224Fair value adjustments to marketable securities — (615) — (3,366)Interest capitalized to lending portfolio balance (1,813) (1,919) (3,586) (2,738)Deferred unit compensation expense 448 449 1,176 676Deferred income tax expense (recovery) 1,208 (473) 1,881 (289)Total $ (7,210) $ (651) $ (7,800) $ (1,840)

Non-cash working capital includes cash generated from (utilized in):


Lending portfolio interest income accrual $ (376) $ (314) $ (464) $ (239)Other non-current assets (9) 1 (402) (177)Amounts receivable (1,351) 881 (2,022) 2,282Prepaid expenses and other current assets (186) (275) 62 (258)Amounts payable and accrued liabilities (1,264) 1,061 322 (2,475)Income tax payable/receivable 3 3 1,660 463Advance received from equity accounted investments 10,608 — 10,608 —

Total $ 7,425 $ 1,357 $ 9,764 $ (404)

During the three and six months ended June 30, 2019, cash interest paid was $2,695 and $4,268 (three and six months endedJune 30, 2018 – $2,599 and $4,026) and cash taxes paid was $nil (three and six months ended June 30, 2018 – $nil). In addition,for the three and six months ended June 30, 2019, the Trust received cash dividends of $nil (three and six months ended June30, 2018 - $219 and 1,169). For the same period, investments in building improvements included non cash transactions of $1and $135 (June 30, 2018 – settlement of $61 and $559) and investments in lease incentives and initial direct leasing costs includedsettlement of payables of $254 and $314 (June 30, 2018 – non-cash transactions of $1,665 and $3,272). Additions to renewablepower assets include non cash transactions of $nil (June 30, 2018 – settlement of payables of $15).

23. COMMITMENTS AND CONTINGENCIES

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

OTHER COMMITMENTS During the six months ended June 30, 2019, the Trust, through a subsidiary, continued to provide a guarantee for up to $45,000(December 31, 2018 - $45,000) pursuant to the requirements of a senior construction loan associated with the Empire Lakeshoreresidential project. The guarantee will be in place for the term of the construction loan and will proportionately scale down asthe construction loan is repaid as unit closings begin to occur. Guarantees of the other underlying development project loanamounts of third parties are $7,500 (December 31, 2018 - $7,500). As at June 30, 2019, the Trust is contingently liable underguarantees that are issued on certain debt assumed by purchasers of income properties up to an amount of $2,794 (December31, 2018 - $44,157).

The Trust is contingently liable for letters of credit in the amount of $3,597 (December 31, 2018 - $1,395) that have been providedto support third party performance.

The Trust may also be contingently liable for certain obligations of joint venture partners. However, the Trust would have availableto it the other joint venture partners’ share of assets to satisfy any obligations that may arise.

The Trust has entered into lease agreements that may require tenant improvement costs of approximately $158 (December 31,2018 - $142).


24. FAIR VALUE MEASUREMENTS

Quoted market prices represent a Level 1 valuation. When quoted market prices are not available, the Trust maximizes the useof observable inputs. When all significant inputs are observable, the valuation is classified as Level 2. Valuations that require thesignificant use of unobservable inputs are considered Level 3. The Trust’s policy is to recognize transfers between fair valuehierarchy levels as of the date of the event or change in circumstances that caused the transfer. During the three months endedJune 30, 2019 no transfers were made between levels 1, 2 and 3. The following tables summarize fair value measurementsrecognized or disclosed in the condensed consolidated financial statements by class of asset or liability and categorized by levelaccording to the significance of the inputs used in making the fair value measurements.

Fair valueAs at June 30, 2019 Carrying value Level 1 Level 2 Level 3Recurring measurements Development and investment holdings $ 105,250 $ — $ — $ 105,250 Income properties 226,839 — — 226,839 Lending portfolio - FVTPL 17,468 — — 17,468

Fair valueAs at December 31, 2018 Carrying value Level 1 Level 2 Level 3Recurring measurements Development and investment holdings $ 118,609 $ — $ — $ 118,609 Income properties 224,310 — — 224,310 Lending portfolio - FVTPL 16,574 — — 16,574

Financial instruments carried at amortized cost are noted below:

Fair valueAs at June 30, 2019 Carrying value Level 1 Level 2 Level 3Fair values disclosed Lending portfolio - amortized cost $ 127,824 $ — $ — $ 126,381 Debt 121,778 — — 122,087

Fair valueAs at December 31, 2018 Carrying value Level 1 Level 2 Level 3Fair values disclosed Lending portfolio - amortized cost $ 127,521 $ — $ — $ 126,825 Debt 195,492 — — 200,500

At June 30, 2019, amounts receivable, cash, restricted cash, deposits, amounts payable and accrued liabilities (excluding the leaseliability), and distributions payable were carried at amortized cost, which approximates fair value due to their short-term nature.


Corporate Information

HEAD OFFICEDream Hard Asset Alternatives TrustState Street Financial Centre30 Adelaide Street East, Suite 301Toronto, Ontario M5C 3H1Phone: (416) 365-3535Fax: (416) 365-6565

INVESTOR RELATIONSPhone: (416) 365-6339Toll free: 1 877 365-3535Email: [email protected]: www.dreamalternatives.ca

TRANSFER AGENT(for change of address, registration or other unitholder enquiries)

Computershare Trust Company of Canada 100 University Avenue, 8th Floor Toronto, Ontario M5J 2Y1 Phone: (514) 982-7555 or 1 800 564-6253 Fax: (416) 263-9394 or 1 888 453-0330 Website: www.computershare.com Email: [email protected]

AUDITORSPricewaterhouseCoopers LLP PwC Tower, 18 York Street, Suite 2600 Toronto, Ontario M5J 0B2

CORPORATE COUNSELOsler, Hoskin & Harcourt LLP Box 50, 1 First Canadian Place, Suite 6200 Toronto, Ontario M5X 1B8

STOCK EXCHANGE LISTINGThe Toronto Stock ExchangeListing Symbol: DRA.UN

For more information, please visitdreamalternatives.ca

Corporate Office

State Street Financial Centre 30 Adelaide Street East, Suite 301 Toronto, Ontario M5C 3H1 Phone: 416.365.3535 Fax: 416.365.6565 Website: www.dreamalternatives.caEmail: [email protected]

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