Q1 2020 Earnings Call

April 23, 2020

Ladies and gentlemen, thank you for standing by welcome to the choice properties real estate investment trusts to Q1 earnings announcement.

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Choice Properties Real Estate Investment Trust Q1 Earnings Announcement. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star then one on your telephone, and if you require any further assistance, please press star zero. Also, please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Doris Spahn, Senior Vice President, General Counsel, and Secretary. Thank you. Please go ahead.

At this time, all participants are in listen only mode.

After the speakers presentation, there will be a question and answer session.

Ask a question during the second only to press Star then one on your telephone and if you're a clarity further assistance. Please press star zero.

Also please be advised that today's conference is being recorded.

I would I like the conference over to your speaker today doors pod Senior Vice President General Counsel Secretary. Thank you. Please go ahead.

Thank you good morning, welcome to choice properties Q1, 2020 conference call I'm joined here. This morning, I rail Diamond President and Chief Executive Officer.

Doris Spahn: Thank you. Good morning, and welcome to Choice Properties Q1 2020 conference call. I'm joined here this morning by Rael Diamond, President and Chief Executive Officer, Mario Barrafato, Chief Financial Officer, and Ana Radic, Executive Vice President, Leasing and Operations. Before we begin today's call, I'd like to remind you that by discussing our financial and operating performance, and in responding to your questions, we may make forward-looking statements, including statements regarding Choice Properties objectives, strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, intentions, outlook, and similar statements concerning anticipated future events, results, circumstances, performance, or expectations that are not historical facts. These statements are based on our current estimates and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from the conclusions in these forward-looking statements.

Doris Baughan: Thank you. Good morning, and welcome to Choice Properties Q1 2020 conference call. I'm joined here this morning by Rael Diamond, President and Chief Executive Officer, Mario Barrafato, Chief Financial Officer, and Ana Radic, Executive Vice President, Leasing and Operations. Before we begin today's call, I'd like to remind you that by discussing our financial and operating performance, and in responding to your questions, we may make forward-looking statements, including statements regarding Choice Properties objectives, strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, intentions, outlook, and similar statements concerning anticipated future events, results, circumstances, performance, or expectations that are not historical facts. These statements are based on our current estimates and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from the conclusions in these forward-looking statements.

Chief Financial Officer.

Executive Vice President leasing operation.

Before we begin todays call I'd like to remind you that definitely discussing our financial and operating performance.

To your question, we may make forward looking statements, including statements regarding choice properties objectives strategies to achieve those objectives as well as statements with respect to managements.

Estimates tensions outlook and similar statements concerning anticipated future events.

Circumstances performance or exceptions that are not historical facts.

These statements are based on our current estimates and assumptions on are subject to risks and uncertainties that could cause actual results to differ material from the conclusion in these forward looking statements.

Additional information on the material risks that can impact or financial results and estimates and assumptions.

Doris Spahn: Additional information on the material risks that can impact our financial results and estimates and assumptions that we made in making these statements can be found in the recently filed Q1 2020 financial statements and management's discussion and analysis, which are available on our website and on SEDAR. I will now turn the call over to Rael.

Doris Baughan: Additional information on the material risks that can impact our financial results and estimates and assumptions that we made in making these statements can be found in the recently filed Q1 2020 financial statements and management's discussion and analysis, which are available on our website and on SEDAR. I will now turn the call over to Rael.

In making these statements can be found in the recently filed Q1 2020 financial statements and management's discussion and analysis, which are available on our website and on SEDAR.

I will now turn the call over to rail.

Thank you Doris and good morning, everyone.

Rael Diamond: Thank you, Doris, and good morning, everyone. Thank you for taking the time to join our Q1 conference call. We are pleased with both the financial and operational results for Q1. Let me start by acknowledging that the impact of the COVID-19 pandemic is profound. We've taken thoughtful actions to mitigate the effects of the pandemic on our day-to-day business operations and continue to focus on what's best for our employees, tenants, and other stakeholders. While it is early and the full impact of the COVID-19 pandemic cannot be predicted, we remain confident that our business model and disciplined approach to financial management will allow us to weather the storm. We do expect that the current pandemic will have the most notable impact on our retail tenants.

Thank you, but taking the time to join our Q1 conference call.

Please with both the financial and operational results for the first quarter.

Let me stop acknowledging that the impact of the curve at 19 pandemic is profound.

We've taken thoughtful actions to mitigate the effects of dependent make on a day to day business operations continue to focus on watch best for employees tenant and other stakeholders.

While these early in the full impact of the carbon 19 pandemic cannot be predicted we remain confident that our business model and disciplined approach to financial management wouldn't allow us to weather the storm.

We do expect did the card pandemic well have the most notable impact on our retail tenants. However, we had an enviable position that approximately 75 cents about retail portfolio is leased to grocery stores.

Rael Diamond: However, we are in an enviable position that approximately 75% of our retail portfolio is leased to grocery stores, pharmacies, or other necessity-based tenants with stable business operations. Beyond retail, we also own high-quality industrial, office, and residential properties in Canada's largest market. This diversification enables us to further reduce risk and stabilize cash flows. As one of Canada's largest landlords, we have an important role to play in helping Canadians and their businesses during these unprecedented times. Earlier this month, we announced that we are assisting qualifying small businesses and independent tenants with a temporary rent deferral. To date, we've deferred approximately CAD 5 million of monthly contractual rent, and generally, the feedback from these tenants has been very positive.

Yes. These are the necessity based tenants, but stable business operations.

Beyond retail, we also had high quality industrial office and residential properties in Canada's largest markets. This diversification enables us to further reduce risk and stabilized cash flows.

As one of Canadas largest landlords with an important role to play in helping Canadians and their businesses journeys unprecedented towards earlier. This month, we announced it we have system qualifying small businesses and independent tenants, but the temporary rent to federal to date, we've deferred approximately $5 million.

Monthly contractual rent and generally the feedback from these tenants has been very positive.

In addition to the qualifying small tenants that we agreed to assist with rents Apparels. We've had numerous requests from other tenants asking for rental concessions simply stating that no kinda pay rent during this period damage.

Rael Diamond: In addition to the qualifying small tenants that we agreed to assist with rent deferrals, we have had numerous requests from other tenants asking for rental concessions or simply stating that they're not gonna pay rent during this pandemic. We're in discussion with our larger tenants who have been adversely affected by COVID and will consider rent deferral requests on a case-by-case basis. April rents have now come due, and as of yesterday, we received 86% of the contractual rents. For clarity, the uncollected amount of 14% includes the rent deferral that we have already offered to our tenants. It is too early to determine how much rent will be withheld in the months ahead as the duration and overall impact of the pandemic is unknown at this time.

Well in discussion with a larger tenants, we have been adversely affected by coal bed and we'll consider rented for real quick on a case by case basis.

April rents have now come true and as of yesterday, we received 86% of the contractual rent for clarity uncollected amount of 14% includes the rent apparel that we have already offered to all tenants.

It is too early to determine how much rent will be withheld into months ahead as the duration and overall impact of the pandemic is on better than at this time, however from a liquidity perspective, we have approximately $1.3 billion available.

Rael Diamond: However, from a liquidity perspective, we have approximately CAD 1.3 billion of available liquidity on our credit facility, and we are well-positioned to weather the current market. Mario will elaborate further on the strength of our balance sheet, but before I hand it over to him, I would like to spend a moment discussing transaction activity. Dispositions are an important part of our strategy. We look to dispose of non-core or non-strategic assets on an opportune basis. During the quarter, we closed on the sale of four non-core assets for gross proceeds of CAD 135 million. This included The Shops at Oakbrook Place, our only US asset, for proceeds of approximately $98 million, a 50% interest in a residential property in Edmonton for CAD 10 million, and a suburban Halifax office asset for CAD 27 million.

Liquidity on our credit facility, and well well positioned to rather the card market Maryann will elaborate further on the strength of our balance sheet they'd be but before I hand, it over time I would like to spend a moment discussing transaction activity.

[noise] dispositions are an important part of our strategy, we look to dispose of non core non strategic assets, an on an opportune basis.

During the quarter, we closed in the sell for noncore assets for gross proceeds of 135 million. This included.

The shops at Oak Brook, only U.S. acid for proceeds of approximately 98 million.

50% interest in the residential property in Edmonton for 10 million.

In a suburban held back office assets for 27 million.

We reinvested 22 million of these proceeds interpret <unk> into a property equipment British Columbia.

Rael Diamond: We reinvested CAD 22 million of these proceeds into a property in Coquitlam, British Columbia. The asset is directly adjacent to our existing asset on North Road, and it was a strategic acquisition for its longer-term redevelopment potential. The combined site is well-located near two lines of the Vancouver SkyTrain station. The additional land assembly will allow us to unlock greater density and improve the site configuration. As it relates to our mezzanine lending program, during the quarter, the borrower on a CAD 24 million mezzanine loan defaulted. The loan is secured by retail property in Barrie, Ontario, and further secured by two other properties where Choice is a joint venture partner. During the quarter, Choice repaid the first mortgage on the property of approximately CAD 44 million.

Yes, it is directly adjacent to existing asset on North Road and includes a strategic acquisition for longer term redevelopment potential.

Combined thought is well located near two lines of the bankers the Scott train station.

The additional land assembly will allow us to unlock greater density and improve the spot configuration.

As it relates to a mezzanine lending program during the quarter the borrow on a 24 million dollar mezzanine loan default.

The only secured by retail property in Barrie, Ontario, and further secured two other properties with choice is a joint venture partner during the quarter choice. We paid the first mortgage on the property of approximately $44 million choices now the only secured lender in the property and he's working with the receiver to ensure a property management they'll be acid and the sale.

Rael Diamond: Choice is now the only secured lender on the property and is working with the receiver to ensure proper management of the asset and the sale process. We have previously taken an allowance of approximately CAD 3 million as it relates to this loan. On the development front, things progressed well in Q1, completing and transferring 6 projects costing us approximately CAD 20 million. The development program has also began to see the impacts from the COVID-19 pandemic. In the short term, our development initiatives will likely be impacted by temporary delays due to work stoppages, labor shortages, and potential delays in supply chain. Our two largest ongoing projects are the residential development at 39 East Liberty Street and 390 Dufferin, both in downtown Toronto. These projects are under vertical construction, and to date, construction on the site continues.

Process.

We have previously taken an allowance of approximately 3 million as it relates to the snow.

On the development front.

Things progressed, well in Q1, completing and transferring six projects costing us approximately 20 million.

The development program.

It's also began to see the impacts from the Cobot 19 pandemic initial term our development initiatives will likely be impacted by temporary delays due to work stoppages labor shortages and potential delays in supply chain.

Our two largest ongoing projects on the residential development at 39 East Liberty village.

And 390 dufresne, both in downtown Toronto.

These projects on the vertical construction and to date construction on the thoughts continues well they may be some short term delays for these projects they continue to progress well.

Rael Diamond: While there may be some short-term delays for these projects, they continue to progress well. Work on planning and rezoning activities is expected to continue with no major delays. However, we do expect delays to the commencement of construction for new development projects. While such delays are expected to be short-term in nature, we are confident that our development initiatives will, in the long term, provide us with opportunity to add high-quality real estate to our portfolio at a reasonable cost. I would now like to pass it over to Mario to provide an update on our financial performance for the quarter.

Welcome planning and rezone activities is expected to continue with no major delayed. However, we do expect delays to the commencement of construction from new development projects well such delays are expected to be short term in nature. We are confident that are developing initiatives as well in the long term provide us with opportunity set high quality growth.

They tell portfolio at a reasonable cost.

I'd now like to pass it over to barrier to provide an update on our financial performance for the quarter.

Thank you Bill good morning, everyone I'll begin with a brief overview of our financial results and then I'll speak to our balance sheet activity.

Mario Barrafato: Thank you, Rael. Good morning, everyone. I'll begin with a brief overview of our financial results, and then I'll speak to our balance sheet activity. Overall, our results for Q1 2020 were in line with our expectations and continue to reflect the stability of our portfolio. Our reported funds from operations for Q1 was CAD 170.7 million or 24.4 cents per unit diluted. This compares to CAD 169.3 million or 25.2 cents per unit diluted for Q1 2019. Included in our NOI were one-time costs of CAD 500 thousand, comprised of bad debt expenses of CAD 900 thousand, offset by +CAD 400 thousand of cost recovery adjustments. None of these items were COVID related.

Overall results for the first quarter of 2020 were in line with our expectations and continue to reflect the stability of our portfolio.

Our reported funds from operations for the first quarter was 170.7 million or 24.4 cents per unit diluted.

This compares to 159.3 million or 25.2 cents per unit diluted for the first quarter of 2019.

Included in our in Hawaii, we're onetime costs of $500000 comprised of bad debt expenses of 900000, offset by 400000, plus the cost recovery adjustments.

None of these items were called it related.

The decline in year over year per unit AFFO was primarily due to the de leveraging that occurred in 2019 proceeds from our equity issue and property dispositions lowered our leverage from a debt to EBITDA of 8.1 times to the current 7.5 times.

Mario Barrafato: The decline in year-over-year per unit FFO was primarily due to the deleveraging that occurred in 2019. Proceeds from our equity issue and property dispositions lowered our leverage from a debt-to-EBITDA of 8.1 times to the current 7.5 times. Included in our Q1 performance was stable growth from Same-Asset Cash NOI. This marks the first quarter that reflects the combined Choice CREIT portfolio in the same asset classification. When we compared to Q1 2019, Same-Asset Cash NOI increased by 1.8%. This growth reflects annual step rents embedded within the Loblaw portion of our portfolio, as well as incremental cash generated from leasing activity throughout 2019 and Q1 2020.

Included in our Q1 performance was stable growth from CMS the cash in Hawaii.

This marks the first quarter that reflects the combined choice creep portfolio in the same asset classification, when we compared to Q1 to 2019 seem asset cash in Hawaii increased by 1.8%. This reflects this growth reflects annual step French embedded within the law block portion of our portfolio as long as incremental cash generated from leasing activity throughout.

2019 in Q1 2020.

Quarter end occupancy remains strong at 97.5% with retail occupancy at a strong 97.8% industrial occupancy at 97.7% and occupancy in office occupancy at 92.9%.

Mario Barrafato: Quarter-end occupancy remains strong at 97.5%, with retail occupancy at a strong 97.8%, industrial occupancy at 97.7%, and office occupancy at 92.9%. We did have negative absorption of 124,000 sq ft compared to Q4. However, one half of that vacancy will be backfilled in H2. Now to our balance sheet. 2019 was a transformational year as we made great improvements to our balance sheet, ending the year with debt and liquidity measures among the best in the industry. We continued to improve our balance sheet in Q1 by adding low-cost, long-term debt to our capital structure.

We did have negative absorption of 124000 square feet compared to Q4, however, one half of that making people be backfield in the second half the year.

Now to our balance sheet 2019 was a transformational year as we made great improvements to our balance sheet ending the year with debt and liquidity measures on the best in the industry.

We continue to improve our balance sheet in Q1 by adding low cost long term debt to our capital structure.

In the first quarter, we issued 500 million of unsecured debentures for weighted average term, a 14 years and a cost of 3.15%.

Mario Barrafato: In Q1, we issued CAD 500 million of unsecured debentures for a weighted average term of 14 years at a cost of 3.15%, financing that now looks very advantageous compared to the current environment. The proceeds were used to repay all of our maturing 2020 debentures. As a result of this transaction, we have no significant debt maturities for the remainder of the year, thus reducing our risk profile and leaving us well positioned. We ended Q1 in a strong liquidity position with CAD 1.3 billion of borrowing capacity on our credit facility. In addition, we have approximately CAD 12 billion of unencumbered assets that we can either finance or prune to raise capital. COVID-19 had no impact to our financial performance.

Financing that now looks very advantageous compared to the current environment.

The proceeds were used to repay all of our maturing 2020 debentures and as a result to this transaction we have no significant debt maturities for the remainder of the year, thus, reducing our risk profile and leaving us well positioned.

We ended the quarter in a strong liquidity position with 1.3 billion of borrowing capacity on our credit facility.

In addition, we have approximately 12 billion of unencumbered assets that we can either finance are prone to raise capital.

Cobot 19 had no impact to our financial performance. However, it did have an impact on some of the risks assumptions used in our property valuations, resulting in the reporting a fair value loss of 148 million.

Mario Barrafato: However, it did have an impact on some of the risk assumptions used in our property valuations, resulting in the reporting of fair value loss of CAD 148 million. These are early days, and we hope to have greater visibility in future quarters on the potential changes in cash flows, risk profile, and the impact it will have on our valuations. Keeping with COVID, our top financial priority in the near term is to maintain a strong liquidity position. This includes capital preservation, maximizing the amounts to be drawn on our credit facilities. With that in mind, we are monitoring our capital expenditures and, where we contemplated using our credit facilities, we are looking at alternate sources of financing. From our low debt level to our high liquidity level to our investment-grade credit rating, we believe we are well positioned to manage the current challenging environment.

These are early days and we don't have greater visibility in future quarters on the potential changes in cash flows and risk profile and the impact that will happen evaluations.

Keeping with cobot, our top financial priority in the near term is to maintain a strong liquidity position.

This includes capital preservation maximizing the amounts to be drawn on our credit facilities.

That in mind, we are monitoring our capital expenditures and where we contemplated using our credit facilities. We're looking at alternative sources of financing.

Mario Barrafato: With that in mind, we are monitoring our capital expenditures and, where we contemplated using our credit facilities, we are looking at alternate sources of financing. From our low debt level to our high liquidity level to our investment-grade credit rating, we believe we are well positioned to manage the current challenging environment. I'll turn the call back to Rael.

So from our low debt level to a high liquidity level to our investment grade credit rating, we believe we're well positioned to manage the current challenging environment.

I'll now turn the call back to rail.

Mario Barrafato: I'll turn the call back to Rael.

Thank you barrier before we open it up two questions I want to summarize why we believe it will emerge from the crisis in a better positioned than most.

Rael Diamond: Thank you, Mario. Before we open it up to questions, I want to summarize why we believe that we'll emerge from the crisis in a better position than most. There are four reasons why I say this. First, our team. I'm incredibly proud of our team's response to date. They've adapted and remained connected, going above and beyond for their fellow coworker and our tenants. Second, our portfolio. We own a high-quality real estate portfolio and have a development program that will provide opportunities to add high-quality, stable real estate assets over the coming years. Next, our balance sheet. We have a strong balance sheet with over CAD 1.3 billion of liquidity that provides the flexibility necessary to help insulate Choice Properties in the face of broader market volatility. Finally, our strategic relationship with our major tenant and the sponsorship of a major unitholder.

And therefore reasons why say this.

First our team.

I'm incredibly proud about teams response to date, they've adapted and remain connected going above and beyond for they feel okay, Okay and outstanding.

Second I portfolio.

We own a high quality real estate portfolio and have a development program no provide opportunities to at high quality stable real estate assets over the coming yes.

Next our balance sheet with a strong balance sheet with over $1.3 billion of liquidity that provides the flexibility necessary to help insulate choice properties in the face for the market volatility.

And finally, a strategic relationship with a major tenant and the sponsorship of a major unitholder loblaw is our largest tenant representing 56%, although gross revenue our relationship with laboy strong and we'll continue to great to create great.

Rael Diamond: Loblaw is our largest tenant, representing 56% of our gross revenue. Our relationship with Loblaw is strong and will continue to create great opportunities for the REIT. George Weston is our largest unitholder, owning approximately 63% of Choice, and is committed to support our growth plans as a long-term owner, manager, and developer of a high quality, diversified real estate portfolio. These relationships will continue to provide stability and growth for Choice. Operator, we'll now open the call for questions.

Opportunities for the right.

George Weston, He's our largest unit holder owning approximately 63% of choice and he's committed to supports our growth plans as a long term oh, not manager and developer of a high quality diversified real estate portfolio.

These relationships will continue to provide stability and growth for choice.

Operator, we'll now open the call for questions.

Thank you.

Operator: Thank you. As a reminder, to ask a question, please press star then one on your telephone, and to withdraw your question, press the pound or hash key. The first question is from Sam Damiani with TD Securities. Your line is open.

A reminder to ask your question. Please press Star then one on your telephone and to withdraw your question press the pound or ASCII.

The first question is from Sam Damiani with TD Securities. Your line is open.

Thanks, and good morning, everyone. A first supposed to start off it's good to see no no impact from a cold. It in Q1 results, but just I guess since then any anecdotal evidence on the leasing front in terms of any impact on the on the although the economic slowdown.

Sam Damiani: Thanks, and good morning, everyone. First, just to start off, it's good to see no impact from COVID in Q1 results. Just, I guess, since then, any anecdotal evidence on the leasing front in terms of any impact on the economic slowdown?

Yeah same Israel. It truly is too early to say, we've actually made great progress and on on our lease maturities to date.

Rael Diamond: Yeah, Sam, it's Rael. It truly is too early to say. We've actually made great progress on our lease maturities to date. You know, I think we had around 2 million feet remaining, and as of the end of March, we had either renewed or at a high probability of renewing roughly 50% of those. But you know, the balance of the year, it's again really too early to say because most tenants are really focused you know on dealing with the current pandemic.

I think we had around 2 million seats remaining and as if the end of March we had either renewed what a high probability of renewing roughly 50% of those but but you know the balance of the yet again really too early to say because most tenants are really focused on.

I'm dealing with the current pandemic.

Right.

Sam Damiani: Right. Okay. I just saw the Loblaw WALT only declined by 0.1 of a year versus Q4, which is an unusually small decline, which would seem to indicate maybe some renewals or extensions may have been executed during Q1. If so, could you tell us, you know, what kind of rent increases were factored into those renewals?

Okay, and I just saw the loblaw well only declined by one of his year versus Q4 of which is an unusually small decline, which would seem to indicate maybe some renewals or extensions may have been executed during the first quarter. If so could you tell us.

You know what kind of a rent went increases were were factors into those renewals.

Hi, Sam Yeah, that's right I don't have a natural that but but we'll look into it it might have been maybe a combination of some of the acquisitions and just rolling into the the average lease term balance, but that's all I can think of right now but <unk>.

Mario Barrafato: Hi, Sam. Yeah, sorry, I don't have an answer for that, but we'll look into it. It might have been maybe a combination of some of the acquisitions and just rolling into the average lease term balance, but that's all I can think of right now, but we'll follow up.

Okay, maybe one final quick one.

Sam Damiani: Okay. Maybe one final quick one. The roughly 10% of the rents that weren't paid and weren't deferred, what's the status of talks there with those tenants, and how much of that do you expect to collect within the next, I guess, couple of weeks?

The roughly 10% of the rents that weren't paid and were deferred what's the status of Oh. So talks there with those tenants and how much of that do you expect to collect a within the next I guess couple of weeks.

Yeah, Chintan Salmon trail, so and again, it's too early to say right now, but you know we in discussions with tenants and on on you know receiving those rents and and we all competent do we will collect the majority of it but again, it's really early days.

Rael Diamond: Yeah. Sam, it's Rael. Again, it's too early to say right now, but you know, we're in discussions with tenants, on you know, receiving those rents, and we are confident that we will collect the majority of it. Again, it's really early days.

Great turn it back thank you.

Sam Damiani: Great. Turn it back. Thank you.

The next question is from Penny beer with RBC capital markets. Your line is open.

Operator: The next question is from Pammi Bir with RBC Capital Markets. Your line is open.

Thanks, and good morning.

Pammi Bir: Thanks, good morning. Can you maybe just comment, maybe going back to your leasing, I guess, commentary, can you comment on what's happening or what you're seeing on the ground in Alberta with respect to your office and industrial portfolios?

Can you maybe just comment maybe going back to your leasing I guess commentary can you comment on whats happening or what you're seeing on the ground.

And.

With respect to your office and.

Industrial portfolios.

Yeah, Hey, Palm Israel, So why not just starting in and I can give you a bit more color. So firstly on the office side you have to remember that office only represents want to said Calgary office represent less than 1% about about total income.

Rael Diamond: Yeah. Hey, Pammi, it's Rael. Why don't I just start, and then Ana can give you a bit more color. Firstly, on the office side, you have to remember that office only represents 1%, Calgary office represents less than 1% of our total income. It is challenging right now. On the industrial side, we actually this quarter we announced that we had leased up the remaining vacancy at our Great Plains Industrial Business Park, so we're very pleased with that. Maybe Ana can give you a bit more color on office and industrial.

It is challenging right now and on the industrial side on the industrial side, we actually this quarter, we announced that we had leased up the remaining vacancy at a great plains.

Actual business box, we very pleased with that and maybe and I can give you a bit more Carla on office and industrial.

Hi, Yes, I mean generally we are still seeing I reasonable amount of activity on the international side crop.

Ana Radic: Hi. Yes. I mean, generally, we are still seeing a reasonable amount of activity on the industrial side across the country and also in Alberta. We have been responding to RFPs. There are logistics users in the market, so I think, you know, there's still some activity in that sector. Moving to office, though, I would say it has been fairly quiet given that tenants are unable to tour premises and people are really, you know, restricted in their movement. We are seeing sort of a quietness generally across the office market.

The country and also in Alberta, we have in responding to RFP. So our logistics users in the market. So I think you know there's still some activity in that sector.

Moving to office, though I would say it has been fairly quiet given that tenants are.

Able to tour premises and people are really you know restricted in their movement. So we are seeing.

Sorry, quietness generally across the office market.

Thank you, maybe just a coming back to I guess it ran collections.

Pammi Bir: Thank you. Maybe just coming back to, I guess, the rent collections. In terms of May, you made some, I guess, high level remarks, but can you comment on what sort of indications or just conversation you're having with tenants regarding May or even, you know, other a little further along in the year?

In terms of May you made some I guess high level remarks, but can you comment on what sort of indications are just conversations.

With tenants regarding.

Regarding may or even you know there.

A little further along in the year.

Yes, it's again, we have to break it up in two to two buckets. One is the small businesses in the small businesses. We had already offered and that route rents a fertile for both April and May and as we said it was around $5 million as will the larger tenants and you know many of them. He gets to break it up into cheap buckets again.

Rael Diamond: Yeah. Again, you have to break it up into two buckets. One is the small businesses. The small businesses we had already offered that rent deferral for both April and May, and as we said, it was around CAD 5 million. As for the larger tenants, you know, many of them, I think you have to break it up into two buckets again. Some are closed and aren't operating at the moment when they've been, you know, significantly impacted, and we're gonna try and work with those tenants. Then some are operating and are just really being opportunistic in this environment. You know, we are gonna try and pursue rent from those tenants as best as possible.

So some all somewhat closed and operating at the moment because they've been.

Significantly impacted and we're going to try and work with those tenants and then some operating and not just really being opportunistic in this environment and you know we're going to crime to sue rent from those tenants as best as possible.

Got it.

Pammi Bir: Got it. Just coming back to the mezz loans. Are there loans outstanding with that borrower that defaulted in Barrie?

Just coming back to the than that.

Are there other loans outstanding with that bore that a defaulted in Barry.

No once we clean this up there would be the end of our relationship with that borrower.

Rael Diamond: No. Once we clean this up, that would be the end of our relationship with that borrower.

Okay.

Pammi Bir: Okay. I guess just maybe looking across the rest of the mezz loan book.

I guess, just maybe looking across the rest of the diversity. The Mezz loan book I'm. So sorry, plumbing I do want to correct. The is a small mezz loan that is part of that as part of the other security, which we would intend to which is cross collateralized and we made reference to the other two properties and small I think it's that's.

Rael Diamond: Pammi, I do wanna correct. There is a small mezzanine loan that is part of it as part of the other security, which is cross-collateralized, and we made reference to the other two properties, and it's small. I think it's sub CAD 2 million.

The $2 million.

Okay got it.

Pammi Bir: Okay. Got it. Just looking across the rest of the mezz loan book, are there any other potential areas of concern in terms of the financial health of the borrowers or any collectibility or repayment concerns?

And just looking across the rest of the Mezz loan book what are your other either potential areas of concern in terms of the financial health of the borrowers or any collectibility a repayment concerns.

No nothing at this time and remember the <unk> the way we used to look at the Mezz loans is it was strategic to help advance our development program, you know really really incredible borrowers credible developers and you know we hope to continue to work with those partners. The wanting Barry was.

Rael Diamond: No, nothing at this time. Remember, the way we used to look at the mezz loans is it was strategic to help advance our development program, you know, really credible borrowers, credible developers and, you know, we hope to continue to work with those partners. The one in Barrie was, you know, a historical relationship and we don't have anything else to do with them.

You know historical relationship and and we don't have anything else to do with them.

Got it maybe just one last one from me rail in terms of the fair value loss booked in the quarter.

Pammi Bir: Got it. Maybe just one last one for me, Rael. In terms of the fair value loss booked in the quarter, how much of that was Alberta Industrial and office versus the non-Loblaw anchored retail?

How much of that was Alberta, industrial and office versus the non leblanc or retail.

Hey, Paul me, probably a of the of the 130 incremental adjustment I would say probably about 30 million related with Alberta related and then the rest stops on the power Center side, we've taken some big write downs last year. So and then it's sort of because it doesn't would've been in there was those neighborhood shopping centers, where it can have a.

Mario Barrafato: Hey, Pami. Probably of the 130 incremental adjustment, I would say probably about CAD 30 million related was Alberta-related. And then the rest on the power center side, we'd taken some big write-downs last year. The biggest adjustment would've been in those neighborhood shopping centers where it didn't have a large or significant grocery-anchored presence.

A large for significant grocery anchored presence.

Hi, Thanks, very much there. Thank you I'll turn it back.

Pammi Bir: Got it. Thanks very much, Rael. Thank you. I'll turn it back.

The next question is from a journey mom with BMO capital markets. Your line is open.

Operator: The next question is from Jenny Ma with BMO Capital Markets. Your line is open.

Thanks, Good morning, I, maybe just to expand on up all these questions about the fair value gains on this is probably getting a little technical but on the retail side. It was described as being non Bob law anchored shopping centers. So is it really specific to loblaw like the grocery stores and then shoppers drug Mart or is it really more so or or.

Jenny Ma: Thanks. Good morning. Maybe just to expand on Pami's questions about the fair value gains. This is probably getting a little technical, but on the retail side, it was described as being non-Loblaw anchored shopping centers. So is it really specific to Loblaw, like the grocery stores and in Shoppers Drug Mart? Or is it really more so, you know, is it just excluding all grocery anchored or pharmacy anchored type of shopping centers?

Jenny Ma: Thanks. Good morning. Maybe just to expand on Pami's questions about the fair value gains. This is probably getting a little technical, but on the retail side, it was described as being non-Loblaw anchored shopping centers. Is it really specific to Loblaw, like the grocery stores and in Shoppers Drug Mart? Or is it really more so, you know, is it just excluding all grocery anchored or pharmacy anchored type of shopping centers?

You know is it just excluding all grocery anchored for pharmacy anchor type of shopping centers.

And so so the way we described it as long as non Leblanc Liberman goes when could we actually looked at the percentage of income coming from a grocery tenants and if the percentage of income I think was greater than 70 or 80%.

Rael Diamond: The way we described it as non-Loblaw anchored or non-grocery anchored, we actually looked at the percentage of income coming from our grocery tenants. If the percentage of income, I think, was greater than, you know, 70% or 80%, we never adjusted the discount rates on those assets. It was where it was less than that percentage we adjusted it. We still think that in this environment, you know, just given what's going on, it speaks to the desirability of, you know, the grocery anchored centers, just shows how stable it is.

We we never adjusted those <unk>, the discount rates and those assets, where it was less than that percentage, we adjusted that and we still think that in this environment.

Just given what's going on it speaks to the desirability of you know the grocery anchored centers.

Just shoot shows how stable it is.

Okay. That's a that's helpful and then when we're looking at potential acquisition opportunities you guys do some deals with loblaw regularly is that something that we should expect to take a pause given the current market environment.

Jenny Ma: Okay. That's helpful. When we're looking at potential acquisition opportunities, you guys do some deals with Loblaw regularly. Is that something that we should expect to take a pause given the current market environment?

Yeah, <unk> Jenny I think it you know focused really on the loss, especially over the last few weeks is being.

Rael Diamond: Yeah, Jenny, I think, you know, our focus really over the last, you know, especially over the last few weeks, has been, you know, on responding to what's going on in the business. We would expect that while we, you know, in this current, call it the crisis, we would look to pause that and look to, I guess, revisit it towards the latter half of the year.

You know on responding to what's going on in the business and and we would expect that while we you know in this current call. It the crisis, we would look to pause that and look to two I guess revisit it towards the laid off of the.

Okay. That's fair and then my last question is about the development. So when you're thinking about the two larger ones that you described.

Jenny Ma: Okay. That's fair. Then my last question is about the development. So we're thinking about the two larger ones that you described, do you think the magnitude of the delay would be mostly commensurate with the magnitude of the economic shutdown? Or do you think there's certain parts of the development cycle that would actually have an extended delay because of all this?

The magnitude of the delay would be mostly commensurate with that the magnitude of of the economic shutdown or do you think there's certain parts of the development cycle that would actually have been extended delay because of all day.

No one on those two projects you know, we just we caution that they may be a delayed the first one is meant to complete in Q4 of 22 anyway, I think what maybe either Q4 2020 or Q1 of 21 and.

Rael Diamond: No, on those two projects, you know, we just caution that there may be a delay. The first one's meant to complete in Q4 of 2020, or I think we may either Q4 of 2020 or Q1 of 2021. At this time, we actually don't think there is much of a delay. We're just cautioning that there may be a delay.

And at this point at this time, we actually don't think there is much of a delay we just cautioning that they may be a delay.

Okay, Great and then my last question is with the onetime items that were mentioned just wanted to clarify that they went to the I know why line on the income statement.

Jenny Ma: Okay. Great. My last question is with the one-time items that were mentioned, just want to clarify that they went through the NOI line on the income statement?

Yes, they they both being in a lot like.

Mario Barrafato: Yes. They, they'd both be in the NOI line.

Okay perfect. That's all for me I'll pass it back.

Jenny Ma: Okay. Perfect. That's all for me. I'll pass it back.

Thanks, Jim.

Rael Diamond: Thanks, Jenny.

The next question is from Mike market Us with the desert in your line is open.

Operator: The next question is from Michael Markidis with Desjardins. Your line is open.

Operator: The next question is from Mike Markidis with Desjardins. Your line is open.

Hi, good morning, everybody.

Michael Markidis: Hi. Good morning, everybody. Just on the 14% of non-pay, or I guess I should say deferred and non-paid rent at this juncture, do you by chance happen to have the square footage associated with that? Would be question one. Then the second thing is just to confirm, is that a gross rent versus a base rent methodology?

Mike Markidis: Hi. Good morning, everybody. Just on the 14% of non-pay, or I guess I should say deferred and non-paid rent at this juncture, do you by chance happen to have the square footage associated with that? Would be question one. Then the second thing is just to confirm, is that a gross rent versus a base rent methodology?

Just on the the 14% of non pay or I guess, I should say deferred and non paid rent at this juncture do you ever happen by chance up and have the square footage associated with that would be question. One in in the second thing is just to confirm a study a gross rent versus a base rent algae.

So I'm bullish I don't have the square footage handy and then yes. It is a gross rent.

Rael Diamond: Unfortunately, I don't have the square footage handy, and then, yes, it is a gross rent.

Okay, great if a if possible if you can follow up with the square footage they'll find that would be a thought would be helpful.

Pammi Bir: Okay. Great. If possible, you could follow up with the square footages offline, that would be helpful.

Mike Markidis: Okay. Great. If possible, you could follow up with the square footages offline, that would be helpful.

Okay. The second the second question I would have is just to confirm on the fair values that you had as of March 30, Onest Twentytwenty.

Rael Diamond: Okay.

Pammi Bir: The second question I would have is just to confirm on the fair values that you had as of 31 March 2020. Was it only discount rates that were touched at this juncture? It would appear so from the tables. Or were other inputs at this juncture left unchanged in terms of your occupancy assumptions, lease rates, and TIs?

Mike Markidis: The second question I would have is just to confirm on the fair values that you had as of 31 March 2020. Was it only discount rates that were touched at this juncture? It would appear so from the tables. Or were other inputs at this juncture left unchanged in terms of your occupancy assumptions, lease rates, and TIs?

Was it only discount rates that were touched at this juncture would appear so from the tables or were other inputs at this juncture lepton changed in terms of your occupancy assumptions and lease rates Npis <unk>.

So we always update on models every quarter for activity during the quarter, but we never ever made any global assumptions on pushing out renewal assumptions with changing rents. We just didn't have enough information to make that assumption.

Rael Diamond: We always update our models every quarter for activity during the quarter, but we never ever made any global assumptions on pushing out renewal assumptions or changing rents. We just didn't have enough information to make those assumptions.

Okay, gotcha, such as discount rates.

Michael Markidis: Okay. Gotcha. Just discount rates. Okay. That's all I have. Thanks very much.

Mike Markidis: Okay. Gotcha. Just discount rates. Okay. That's all I have. Thanks very much.

Okay. That's a that's all out thanks very much.

The next question is wrong, but how well leave with National Bank financial your line.

Operator: The next question is from Tal Woolley with National Bank Financial. Your line is open.

Hi, good morning.

Tal Woolley: Hi, good morning. If we go across the asset classes, is there anything in, like, the operating costs that maybe we from the outside wouldn't necessarily expect, that you are noticing, in terms of managing the properties during this crisis? Like, I would think maybe like office there would be maybe some incremental costs you might need to deal with. Just any examples of those types of things that we should keep our mind on over the next couple quarters?

If we go across the asset classes is there anything in like the operating costs, but maybe we from the outside wouldn't necessarily expect but you are noticing a in terms of managing the properties. During this crisis like I think maybe like office 30, maybe some incremental costs you might need to deliver <unk> today.

Examples of those types of things that we should keep in mind on over the next couple of quarters.

So so nothing from an incremental cost if anything we as you know definitely achieve cost savings, which we intend to obviously Pos on top tenants.

Rael Diamond: So nothing from an incremental cost. If anything, we've, you know, definitely achieved cost savings, which we intend to obviously pass on to our tenants. You know, maybe Anna can just give you a flavor of what those would be across the various asset classes.

And maybe and I can just give you a flavor of what those would be across the various asset classes.

Sure I count that's who we are obviously, having to the catch operations and given the lower occupancy in the belting raising that [laughter] I, you know time to make sure that work yeah capping off a rapid time to market not reducing lighting levels actually doing kids swaps and are building. So that we can now.

Ana Radic: Sure. Hi, Tal. Yeah. We are obviously having to adjust our operations, and given the lower occupancy in the building, we're using this, you know, time to make sure that we're, you know, adjusting all the run times of our equipment, reducing lighting levels, actually doing tube swaps in our building so that we can lower our overall energy costs. That's been a big focus, so we are already seeing a decline in our energy consumption. We're also, you know, being creative in how we deploy our operations teams. There's been work previously we would've contracted out. We're now using our own staff to go in and perform maintenance in our industrial portfolio, do repairs, and so forth, and generally sort of reducing any discretionary spending and so forth.

Well actually cost a bit epic. Okay. So we are already saying a decline in our energy consumption.

Oh, you know being creative in how we deploy operations teams. There's been worked previously little contract out right now using our own staff to go and then perform maintenance in our industrial portfolio give repairs and so forth [noise].

Generally sort of reducing any discretionary spending and stuff. So generally where were really I think I at least emotional declining cost.

Ana Radic: Generally we're really seeing at least a marginal decline in cost.

Okay.

Tal Woolley: Okay. Maintenance CapEx for the year, what sort of assumption should we be using for 2020?

And maintenance Capex for the year.

What sort of assumptions should we be using her 2020.

I think from a global assumption that truly to give you a good number but maybe I can speak to the approach we taking.

Rael Diamond: I think from a global assumption it's too early to give you a good number, but maybe Anna can speak to the approach we're taking.

[noise] I'm sure I sockets really has been ensuring that sanction projects you don't <unk>, we're focusing on though so we have project tied to lease deals and.

Ana Radic: Yeah. Sure. Our sole focus really has been ensuring that essential projects, you know, we're focusing on those. We have projects tied to lease deals and, you know, preparing space for tenants, so we're absolutely moving all of that forward. As our ability to complete maintenance and improvement projects, you know, is being impacted. I mean, one of our biggest challenges that we're facing is sort of logistical in that Loblaw's being our anchor tenant and we have other grocery anchored sites where we had paving projects and roofing projects. These sites are actually seeing increased traffic and just, you know, it isn't feasible to start shutting down portions of the parking garages or the parking area.

Preparing space for tenants. So we're absolutely moving all of that forward [laughter], our body to compete maintenance hadn't gotten improvement projects is being impacted I mean, one of our biggest challenge is sad that we're facing any sort of a chemical and not buying our anchor tenant can we have other grocery anchored sites, where we had paving projects.

And running projects the extra actually seeing increased traffic and [laughter] you know being.

It has to be able to start shutting down portions of the parking garage.

Looking at the parking garage [laughter] parking area how.

Ana Radic: We're just kind of taking a wait and see approach there and also, you know, coordinating roof replacements with our tenants who are really focused on operating their business. That's kind of resulting in us having to just push projects, further later into the year and some might go into next year.

Where do you kind of taking a wait and see approach.

So on yeah coordinating were replacing it with I can answer it really focused on operating their best that so that's kind of personal opinion not having to get pushed projects have further later and yeah, I know I'm not going to next year.

Say that said, we received as a huge benefit that a major tend to go out well grocery stores, so busy and we have to delay capital because of the.

Rael Diamond: Yeah. As Ana said, we see it as a huge benefit that our major tenants or our grocery stores are so busy and we have to delay capital because of their, you know, the operations being busy.

You know the operations being busy.

Okay, and then other tenants that have elected not to pay rent. Thus far there anyway, you can sort of.

Tal Woolley: Okay. Of the tenants that have elected not to pay rent thus far, is there any way you can sort of characterize who these tenants are? Like, you know, is it a certain type of retailer or is it regional? Like, can you just give us a little bit of color about where the risk is?

Characterize ER.

Who needs tenants are like is there a you know it took a certain type of retailer or is it regional like can you just give us a little bit of color about where the risk of.

Yes, it's a saving on regional but it would be.

Rael Diamond: Yeah. It's maybe not regional, but it would be, you know, you would expect the tenants, especially the ones who are not operating, so if it's, you know, the fitness users, obviously, would be, you know, a large non-payer. I don't know, Anna, if you wanna give any other color.

You do it would be you would expect the tenant, though especially the ones who all law nonoperating say, if it's you know the fitness users obviously would be a large non pay a I don't and if you want to give any other color.

[noise] I know I mean, it would be predominantly it is passed national and regional tenants who have been.

Ana Radic: No. I mean, predominantly it is both national and regional tenants who have been, you know, completely closed. Obviously, any sort of fashion or consumer goods groups are being impacted, restaurants, for example. Then we have tenants who have been forced just to do drive-throughs and so forth. They're also, you know, requesting we talk to them about how we help them in this situation.

Completely closed, obviously any sort of fashion or consumer goods.

Groups are being impacted restaurants for example, and then we have tenants or they have been forced us to do drive drive-thrus and so far so they.

So yeah.

<unk> requesting we talk to them about how how we help and then the situation.

Okay and then just my last question you guys are sort of any unique position as part of a bigger loblaw Western George Western complex.

Tal Woolley: Okay. Just my last question. You guys are sort of in a unique position as part of a bigger Loblaw / George Weston complex. It's probably one of the few entities out there in the market, you know, who could even contemplate playing some offense during this period. I recognize you are very concerned with dealing with what's going on right now today. I'm just wondering in your conversations with Loblaw / George Weston, you know, has there any sort of, you know, potential changes in strategy or tactics that you might see them, you know, employ over the next little while? Or is it just sort of business as usual for now?

And it's probably one of the few entities out there in the market you know if you could even contemplate claiming some offer some off office. During this period I recognize things are very concerned with dealing with what's going on right now today.

I'm just wondering in your conversations with western Loblaw.

Has or you know any sort of.

You know potential changes in strategy or tactics that you might see them.

You know employee over the next little while or is it just sort of business as usual for now.

No look one now focus is really being two responding what's going on on in on in the business over the longer term. Our strategy is the same you're not acquiring high quality assets and clearly we are in a far stronger financial position than most and our properties are clearly performing better than most so things start to stabilize.

Rael Diamond: No. Look, right now our focus has really been into responding to what's going on in the business. Over the longer term, our strategy is the same, you know, acquiring, you know, high quality assets. Clearly we are in a far stronger financial position than most, and our properties are clearly performing better than most. As things start to stabilize, we definitely will look to be a net acquirer of assets. Weston has been a great financial sponsor and a very stable unit holder for us. Okay. That's great. Thanks very much, everybody.

We definitely looks to be at net acquirer of assets and western has been a great financial sponsor in a very stable unit holder for us.

Tal Woolley: Okay. That's great. Thanks very much, everybody.

Okay. That's great. Thanks, very much everybody.

The next question is from a mention Gupta Scotiabank. Your line is open.

Operator: The next question is from Himanshu Gupta with Scotiabank. Your line is open.

Thank you and good morning.

Himanshu Gupta [Director, Equity Research Analyst: Thank you, and good morning. Just on the rent collection discussion, how do you balance the long-term tenant viability versus the short-term rent collection? I mean, are you prepared to offer some kind of rent abatements or rent reduction or free rent in the near term, maybe as opposed to providing some kind of tenant allowance for a replacement tenant down the road?

Himanshu Gupta: Thank you, and good morning. Just on the rent collection discussion, how do you balance the long-term tenant viability versus the short-term rent collection? I mean, are you prepared to offer some kind of rent abatements or rent reduction or free rent in the near term, maybe as opposed to providing some kind of tenant allowance for a replacement tenant down the road?

Just wanted to then collection discussion how do you balance the long term viability wasn't just short terms and condition I.

I mean are you prepared to offer some guy.

The big names or the introduction Mophie ranked in the near Joan.

Maybe as opposed to providing some kind of tenda the loans for the patient done in Dunkin Road.

No I think I think it's can evolve as this goes longer human nature and right. Now we are speaking to tenants about deferrals and not yet abatements.

Rael Diamond: Look, I think it's gonna evolve as this goes longer, Himanshu. Right now we are speaking to tenants about deferrals and not yet abatements.

Sure and maybe on the deficit outside.

Himanshu Gupta [Director, Equity Research Analyst: Sure. Maybe on the deferral side, around 60 days period, I mean, based on your analysis, do you think is that period enough for smaller tenants to survive this kind of market turmoil? How confident are you in terms of eventually collecting this amount? I mean, any sense on bad debts at this point of time, or is it too early to say?

Himanshu Gupta: Sure. Maybe on the deferral side, around 60 days period, I mean, based on your analysis, do you think is that period enough for smaller tenants to survive this kind of market turmoil? How confident are you in terms of eventually collecting this amount? I mean, any sense on bad debts at this point of time, or is it too early to say?

She Cindy you did.

Do you think that Peter and now for smaller tenants.

Survived this kind of marketing <unk>.

And how confident are you in terms of eventually conducting this amount I mean any sense on buybacks at this point of time, well just two or you can see.

Yeah, I think I think you said it best idea, it's really too early to tell right now and then different provinces are going to hopefully start getting back sooner. So again, we'll we'll obviously had more to report next quarter. Amy I think we all quite positive on is the government is obviously speaking about assisting small tenants.

Rael Diamond: Yeah. I think you said it best at the end. It's really too early to tell right now, and then different provinces are gonna, you know, hopefully start getting back sooner. So again, we'll obviously have more to report next quarter. Then the other thing we are quite positive on is the government is obviously speaking about assisting small tenants, and we're obviously tracking that, and we think it'll be very helpful.

And we obviously tracking data and we think it'll be very helpful.

Sure and in type. One next question was on the government stimulus and or do you have a sense. So what's the Cindy just a smaller tenants have qualified for any kind of stimulus obviously you can call.

Himanshu Gupta [Director, Equity Research Analyst: Sure. In fact, my next question was on the government stimulus. Do you have a sense of what percentage of the smaller tenants have qualified for any kind of stimulus or we are still waiting for, you know, more details to be coming out on the stimulus programs?

Himanshu Gupta: Sure. In fact, my next question was on the government stimulus. Do you have a sense of what percentage of the smaller tenants have qualified for any kind of stimulus or we are still waiting for, you know, more details to be coming out on the stimulus programs?

Did you change to be coming out I understand the skill gaps.

No. We obviously waiting for for more details to be released by the government.

Rael Diamond: No, we're obviously waiting for more details to be released by the government.

Okay.

Himanshu Gupta [Director, Equity Research Analyst: Okay. Maybe just one clarification question on the rent deferral discussion. I think you have mentioned that you are in touch with some larger tenants as well. Any specific tenants you are referring to, and what kind of requests are you receiving from your larger tenants?

Himanshu Gupta: Okay. Maybe just one clarification question on the rent deferral discussion. I think you have mentioned that you are in touch with some larger tenants as well. Any specific tenants you are referring to, and what kind of requests are you receiving from your larger tenants?

And maybe just one clarification question then definitely discussion.

I think you mentioned that you wouldn't dutchman, some larger tenants as well or any specific doesn't show nothing to and what kind of request I didnt see things on the larger does.

Yeah, we prefer not to to speak about any specific and tenant names, but as we said earlier, we really don't even discussions on deferrals motors and abatements.

Rael Diamond: Yeah. We prefer not to speak about any specific tenant names, but as we said earlier, we really are in discussions on deferrals, not as in abatements.

Got it okay. Thank you.

Himanshu Gupta [Director, Equity Research Analyst: Got it. Okay. Thank you. I'll turn it back.

Himanshu Gupta: Got it. Okay. Thank you. I'll turn it back.

[noise]. This question is from Sam Damiani with TD Securities. Your line is open.

Operator: The next question is from Sam Damiani with TD Securities. Your line is open.

Thanks, just just a quick follow up with Oh potentially increase in bad debts being one of the larger variables impacting results going forward.

Sam Damiani: Thanks. Just a quick follow-up. You know, with the potential increase in bad debts being one of the larger variables impacting results going forward, should we look to the note in the financial statements for the change in the allowance as being sort of the sole disclosure in this regard, or should we expect any other disclosure in terms of the impact of bad debt in NOI in Q2 and beyond?

Should we look to the node in the financial statements for the changes the allowance as being sort of the sole disclosure in this regard <unk> or should we expect any other disclosure in terms of the impact of bad debt in and then why in Q2 wouldn't be off.

Hey, Sam Yeah, I mean, I'm right now, we're just reading everything and stuff is revenue with the receivable and were just a delaying the collection.

Rael Diamond: Hey, Sam. Yeah, I mean, right now we're just treating everything as revenue with the receivable, and we're just delaying the collection. We've had discussions kind of like when do you realize absent an insolvency, when do you book it? We're gonna kinda play it case by case. We're not actually sure where the disclosure will be, but obviously if it's significant though, there'll be full disclosure.

And we've had discussions kind of like when do you realize absent an solvency when do you book and so.

We're going to kind of play it case by case and the this we're actually sure where the disclosure will be but obviously the significant though they'll be there'll be some disclosure.

Thank you very much.

Sam Damiani: Thank you very much.

Again as a reminder, please press star one to ask a question. The next question is from like market as we do Jordan. Your line is open.

Operator: Again, as a reminder, please press star one to ask a question. The next question is from Mike Markidis with Desjardins. Your line is open.

Thanks, just a quick follow up and I apologies. If you cover this when a immense she was asking but stimulus, but well you did mention and remind us of the I'm going to get the acronym wrong, but the Canadian commercial rent relief program and I realize the government hasn't released any details but in your discussions with sort of I don't know I guess that you're gonna be log us or anybody in the industry.

Michael Markidis: Thanks. Just a quick follow-up, and apologies if you covered this when Himanshu was asking about stimulus. Rael, you did mention and remind us of the, I'm gonna get the acronym wrong, but the Canada Emergency Commercial Rent Assistance, and I realize the government hasn't released any details. In your discussions with sort of, I don't know, I guess the term would be lobbyists or anybody in the industry, have you any sense on how that might work or how that might potentially assist you? I mean, aside from the obvious, I'm just trying to think of the administration and who the money flows to.

Mike Markidis: Thanks. Just a quick follow-up, and apologies if you covered this when Himanshu was asking about stimulus. Rael, you did mention and remind us of the, I'm gonna get the acronym wrong, but the Canada Emergency Commercial Rent Assistance, and I realize the government hasn't released any details. In your discussions with sort of, I don't know, I guess the term would be lobbyists or anybody in the industry, have you any sense on how that might work or how that might potentially assist you? I mean, aside from the obvious, I'm just trying to think of the administration and who the money flows to.

Have you any sense on how that might work or how that might potentially assist you.

I mean aside from the obvious I'm, just trying to think of the administration and who the money flows.

And you know again look, let's let's wait for more disclosure, we don't want to.

Rael Diamond: You know, again, look, let's wait for more disclosure. We don't want to give misinformation on the call.

Nation on the cool.

Okay. That's fair thank you.

Michael Markidis: Okay. That's fair. Thank you.

Mike Markidis: Okay. That's fair. Thank you.

And there are no further questions I'll turn the call back to Mr. Diamond for any closing remarks.

Operator: There are no further questions. I'll turn the call back to Mr. Diamond for any closing remarks.

So we want to thank everyone for joining us on todays call. She's do all you can to stay healthy and be say thank you.

Rael Diamond: We wanna thank everyone for joining us on today's call. Please do all you can to stay healthy and be safe. Thank you.

Ladies and gentlemen. This concludes today's conference call you may now disconnect thinking.

Operator: Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thank you.

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