Q1 2020 Earnings Call

May 5, 2020

Operator 3: Good day, ladies and gentlemen, and welcome to the RioCan Real Estate Investment Trust Q4 2019 Conference Call. At this time, all participants are in a listen-only mode. After management's presentation, there will be a question and answer session, and instructions will follow at that time. I would now like to hand the conference call over to Jennifer Suess, Senior Vice President and General Counsel. You may begin.

Operator: Good day, ladies and gentlemen, and welcome to the RioCan Real Estate Investment Trust Q4 2019 Conference Call. At this time, all participants are in a listen-only mode. After management's presentation, there will be a question and answer session, and instructions will follow at that time. I would now like to hand the conference call over to Jennifer Suess, Senior Vice President and General Counsel. You may begin.

Hi, all participants are in listen only mode. After management's presentation. There will be a question answer session and instructions will follow.

I would now what do you have the conference call over to Jennifer soon.

Senior Vice President and General Counsel you may begin.

Jennifer Suess: Thank you and good morning, everyone. I am Jennifer Suess, Senior Vice President, General Counsel, and Corporate Secretary for RioCan. Before we begin, I would like to draw your attention to the presentation materials that we will refer to in today's call, which were posted together with the MD&A and financials on RioCan's website earlier this morning. Before turning the call over to Jonathan, I'm required to read the following cautionary statement. In talking about our financial and operating performance and in responding to your questions, we may make forward-looking statements, including statements concerning RioCan's objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance, or expectations that are not historical facts.

Thank you very good morning, everyone I've never seen senior Vice President General Counsel in corporate Secretary for real time before we begin I would like to draw your attention to the presentation materials that we will refer to in today's call. We proposed pieced together with young DNA and financials on <unk> website earlier this morning.

Turning the call over to Jonathan I required to read the following cautionary statement.

Talking about our financial and operating performance and in responding to your question. We may make forward looking statements, including statements concerning Realtimes objective. It strikes me too if he doesn't Jack did as well as statements with respect to management's beliefs plans estimates and attention and similar statements concerning anticipated future events result circumstances performance.

Terrific pieces that are not historical fact these statements are based on our current estimates and assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from conclusions any forward looking statement.

Jennifer Suess: These statements are based on our current estimates and assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from the conclusions of these forward-looking statements. In discussing our financial and operating performance and in responding to your questions, we will also be referencing certain financial measures that are not generally accepted accounting principle measures, GAAP, under IFRS. These measures do not have any standardized definition prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other reporting issuers. Non-GAAP measures should not be considered as alternatives to net earnings or comparable metrics determined in accordance with IFRS as indicators of RioCan's performance, liquidity, cash flows, and profitability. RioCan's management uses these measures to aid in assessing the Trust's underlying core performance and provides these additional measures so that investors may do the same.

In discussing our financial and operating performance in responding to your question. We will also be referencing certain financial measures that are not generally accepted accounting principle major gas under my apart.

Measures do not have any standard definition prescribed by harassed and are therefore unlikely to be comparable to similar measures presented by other reporting issuer non-GAAP measures should not be considered as alternatives to net earnings were comfortable metric determined in accordance with they are by far and indicators of real cash performance liquidity cash flows and profitability Riocan management.

With these matters to eat in assessing the trends underlying core performance and provides additional measures. So that investors may be the same additional information on the material risks that could impact our actual results and the estimates and assumptions we applied in making these forward looking statements younger with details on our need to non-GAAP financial measure hitting them the financial statements for the period ended March.

Jennifer Suess: Additional information on the material risks that could impact our actual results and the estimates and assumptions we applied in making these forward-looking statements, together with details on our use of non-GAAP financial measures, can be found in the financial statements for the period ended 31 March 2020, and management's discussion and analysis related thereto, as applicable, together with RioCan's most recent annual information form that are all available on our website and at www.riocan.com. I now turn the call over to Jonathan Gitlin, our President and Chief Operating Officer.

Sorry for 2020, and management's discussion and analysis related there to applicable together would react has one recent annual information form that are all available on our website at www dot the arc Dot com.

I now turn the call over to Jonathan given our president and Chief operating Officer.

Jonathan Gitlin: Thanks so much, Jennifer Suess, and good morning, everyone. Really appreciate you taking the time to participate in today's call. We're very pleased with our strong results that we achieved in Q1, and I look forward to taking you through RioCan's quarterly operating metrics shortly. First off, we recognize that the Canadian real estate landscape has changed considerably in the recent weeks, and I'll certainly focus on the significance of COVID-19 and its impact on our operations. However, it's important that we highlight our healthy Q1 results and highlight the fact that they were driven by the quality of our major market portfolio, our desirable locations, our resilient tenant mix, and our experienced leadership team.

Thanks, so much sharper and good morning, everyone really really appreciate you taking time to participate in today's call.

We're very pleased with our strong results were received from the first quarter and I look forward to take me through rare cancer.

Where do you record shortly but first of all of whom we recognize the Canadian will say landscape has changed considerably in the reason, we and I was really focused on the significance of Cobra 19, and its embark on reparations Harbor.

It's important that we highlight our healthy Q1 results and how is the fact that there were driven by the quality of or major markets portfolio desirable locations are resilient.

And our experienced leadership team along strike for balance sheet, which she's going to speak about in a minute. These are the attributes that are primarily driven real camptothecin was 26 years and will fuel break long into the future.

Jonathan Gitlin: Along with the strength of our balance sheet, which Chi's gonna speak about in a minute, these are the attributes that have primarily driven RioCan's success for the last 26 years and will fuel growth long into the future. I'm gonna begin with an overview of our Q1 operating results, and I'll then highlight the key initiatives we've implemented to mitigate the impact of COVID-19 and what it's done to our operations. I'll also discuss the initiatives we've implemented to support the long-term success of our business. Our funds from operation per unit in the quarter was a healthy CAD 0.46.

I will begin with an overview of our Q1 operating results and all that highlights the key initiatives. We just want to mitigate the impact of cold in my view and what it's under operation and I'll also discuss initiative. We've implemented this important long term success suburban.

Our funds from operation per unit in the quarter, because there will be 46 cents or order our first quarter major market results demonstrate the quality of the portfolio and they could commercial same property I was a 3.1% which led to that is our highest since 2011 committed occupancy of 97.3% and the renewal of 107.

Jonathan Gitlin: Our Q1 major market results demonstrate the quality of the portfolio, and they include commercial same property NOI growth of 3.1%, which I should add is our highest since 2011, committed occupancy of 97.3%, and the renewal of 117 leases with a healthy upside in rent of almost 6%, just under 5.9%. Our blended spreads for new leasing and renewals was 6.5%. In addition, we signed 74 new leasing deals with an average rent of over CAD 33. We understand the environment in which we're currently operating is profoundly different from the conditions we experienced in the Q1.

Hey leases with the LTL sudden run of almost 6% just under 5.9% our blended spreads for new leasing and renewals was 6.5%. In addition, we successfully for new leasing deals with an average rent of over $33.

We understand the environment in which we're currently operating is profoundly different from the condition of Rexford from first quarter. My message today is the same attributes to deliver a strong first quarter results. We're currently seeing up through these challenging time and they're also going to drive above our long term, but.

Jonathan Gitlin: My message today is the same attributes that delivered our strong Q1 results are currently seeing us through these challenging times, and they're also gonna drive us in our long-term growth. How are we handling COVID-19? Well, at the outset of the crisis, RioCan mobilized rapidly and effectively to address the new market dynamics. We immediately engaged our pre-established crisis management team, executed our pandemic plan, and transitioned to an efficient and fully remote workforce. Beyond our immediate response to the crisis, it's important to note that over the last 10 years, RioCan has strategically transformed its portfolio to make it more resilient for times like these. As a result of this transformation, our portfolio is now concentrated in Canada's fastest-growing, most densely populated, and high-income areas.

So how we handle in cold and maybe what would be outside of the crisis real can mobilize rapidly and effectively to address the new market dynamics I mean, we immediately engage our pre established practice management team executed or pandemic plan and transition to an efficient and fully remote workforce, but beyond our immediate response to the crisis.

Important to note that over the last penny or rear camera strategically transform its portfolio to make it more resilient for times like these and as a result from this transformation our portfolio was not concentrated in Canada. The fastest growing most densely populated high income area.

Jonathan Gitlin: We've got over 90% of our annualized rental revenue generated from Canada's six major markets and over 51% from the Greater Toronto Area. Because of this, we also benefit from a resilient, well-diversified tenant base and a strong focus on necessity-based and service-oriented tenants. I'm now gonna shift to the important subject of rent collection for our commercial operations. From the outset of this crisis, we've tailored our approach to rent collection. Our position is clear: those who can pay need to pay, so we can offer relief to those who need it most. We offered an automatic interest-free 60-day gross rent deferral with 12-month payback period to qualifying independent tenants that requested relief. Independent tenants represent approximately 15% of RioCan's revenue.

At over 90% of our annualized rental revenue generated from Canada to six major markets.

Before and 51% from the greatest draw area because of this redundant we also benefit from a resilient well diversified tenant base and a strong focus on necessity based in service oriented.

I'm not going to ship to the important subject right collection for commercial operation.

And the outcome of this crisis, we held our approach to recollection. Our position is clear those are competing need to pay so we can offer relieved to those who need at most.

Awkward automatic interest free 60 day gross revenue deferral with 12 month payback periods of qualifying independent data the requested really independent tenants represent approximately 15% in real terms revenue.

Jonathan Gitlin: The automatic deferral allows RioCan's resources to focus on approximately 85% of our revenue that comes from national and regional tenants. We leverage our scale and our relationships to negotiate terms of relief, if any, with the position that RioCan views itself as the last means of support. To date, we've not granted relief to any of our top 30 tenants. Ultimately, we approved approximately CAD 50 million of April rent deferrals, which represents approximately 17% of total April gross rent. Quarterly, RioCan collected approximately 66% of non-deferred April gross rents. To maximize our ability to collect revenue in the near and long term, our focus is now on enforcing leases with national and regional tenants that represent the majority of our rental revenue.

Automatic referral allows real cares resources to focus on approximately 85% of a revenue that comes from national and regional.

We leverage our skill in a relationships to negotiate terms are really if any what the position. The real Cambia is itself a glass me will support the date would not granted released any of our top during.

Ultimately, we approved approximately $15 million $50 million April rent default would represent approximately 70% of total April gross right.

The quarter, we really can't collect that route six approximately 66% of non for April girls right.

To my mother ability to collect revenue in the near and long term. Our focus is now unfortunately, because of national and regional tens of represent the majority of our rental revenue.

Jonathan Gitlin: Leveraging one of the many potential remedies available to us, including potentially drawing on the approximately CAD 30 million in outstanding security deposits, issuing default notices, terminating leases, and/or commencing enforcement proceedings on a case-by-case basis. Pending bankruptcy, we anticipate we will collect most, if not all, that is owed to us. This is why we've always made the strength of covenant a priority in assessing prospective tenancy. Now, the recently announced Canada Emergency Commercial Rent Assistance program, rolls off the tongue, or CECRA, appears to be designed to provide further relief to independent retailers. Now, as a responsible Canadian landlord and industry leader, we believe it's incumbent upon us to actively consider participating.

The leveraging one of the many central remedies available to us, including actually drawn on the approximately $30 million, an outstanding security deposits issued to fall versus terminating leases and a in North America reinforcement procedures on the kids like there's basis.

The bankruptcy, we anticipate will collect most if not all that is off to off. This is why I'm always made its record covenant I've heard you can assessing perspective tenants.

Now the recently announced Canadian emergency commercial rental assistance program rolled off the time or Sempra appears to be designed to provide further relief independent retailers I was a responsible greater landlord an industry leader, we believe it's incumbent upon us.

It could have participated to upon receipt of additional program details from the federal and provincial governments, which we believe is forthcoming we'll continue our due diligence to determine the eligibility of our various properties and whether the programming in the best interest of our business and pet food.

Jonathan Gitlin: Upon receipt of additional program details from the federal and provincial governments, which we believe is forthcoming, we'll continue our due diligence to determine the eligibility of our various properties and whether the program is in the best interest of our business and tenants. While we're strategically managing our rent collection process, it's important to acknowledge the critical competitive advantages that support the security of our income. We've got tremendous scale, we've got long-term relationships with our tenants. We're not overexposed to any one single tenant, and no one tenant accounts for more than 5% of our annualized rental revenue. Our portfolio consists of desirable, established, convenient locations recognized for their growing appeal to customers. We complement and accelerate this appeal through mixed-use intensification. Even in a challenged economic environment, tenants will be reluctant to give up these prime locations.

What we're strategically managing a recollection process important to acknowledge the critical competitive advantages that supports the security of Aurico. We've got tremendous scale, we've got long term relationships with our time as.

We're not over exposed to any one single I mean, no onetime and accounts for more than 5% of our annualized rental revenue.

Our portfolio consists of desirable established convenient location recognized for their growing appeal to customers. We complement them accelerate this appeal for mixed use intensification, even in a challenged economic environment tenants will be reluctant to give up the prime location and finally real can't leadership team has demonstrated for stuff in navigating.

Jonathan Gitlin: Finally, RioCan's leadership team has demonstrated success in navigating significant and unexpected tenant failures in the past, including Target and Sears. We consistently replace vacancies with strong, compelling tenants that continue to strengthen our portfolio. Now, with respect to our residential operations, our first two rental residential buildings being East Central in Toronto and Frontier in Ottawa, are representative of future RioCan Living projects. In the face of COVID-19, we believe the collection of approximately 97% of April's residential rent is a testament to the desirability of RioCan Living's offering. These are high-quality buildings. They're in prime transit-oriented locations. Residents also recognize the significant effort of our property managers to keep their spaces safe and to look after their well-being. These are places that people want to be and will continue to wanna be.

Significant amount of expecting kind of failures in the cost including targets here as we consistently were placed bacon seems a strong compelling tenants they continue to strengthen our portfolio.

And with respect to our residential operations. The first two rental residential buildings being in central and draw and frontier in Ottawa, a representative of future Riocan moving projects in the face of Cobot 19, we believe the collection of approximately 97% of April's residential right is a testament the desirability broken live is offer.

These are high quality buildings that are prime transit oriented location residents also recognize the significant effort of our property managers to keep this phase is safe and to look after their wellbeing. These are places the people want to be will continue to want to be in spite of Copel 19, construction soften slowdowns riocan living will continue at a high quality.

Jonathan Gitlin: In spite of COVID-19, construction stops and slowdowns, RioCan Living will continue to add high-quality rental residences to our portfolio over the next few years. As residential construction is considered essential, the majority of RioCan mixed-use projects continue to progress. Brio, which is a 163-unit rental residential property in Calgary, and our first development with partner Boardwalk REIT, was completed at the end of March. In addition to the combined 857 units at East Central, Frontier, and Brio, RioCan Living has more than 1,800 additional purpose-built rental residential units under construction. We also have 3,000 condominium and townhouse units either completed or at various stages of development. These projects will add much needed high-quality residential inventory into the market, and at the same time, they provide RioCan with additional revenue diversification.

The rental references to our portfolio over the next few years as residential construction is considered essential the majority riocan mixed use project continues to progress.

Ill, which is 163 unit rental residential property in Calgary and our first development with part of Boardwalk read was completed at the end of March. In addition to the combined 857 units and east Central Frontier Abril rear camera has more than 18 hungry additional purpose built rental residential units under construction.

We also have 3000 condominium and townhouse units.

Either completed or at various stages of development. These projects will have much needed high quality residential inventory in the market at the same time, they provide real Kim with additional revenue diversification.

Jonathan Gitlin: We will, however, ensure that we are judicious with our 2020 expenditures by pausing spend on new or early-stage development projects. We've deferred approximately CAD 150 million in hard and soft development costs from a base of the CAD 500 million budget. That being said, RioCan is gonna continue our important intensification work. The program delivers obvious benefits, including improving the profile of our portfolio, adding net asset value, and diversifying our sources of cash flow. In addition to effectively managing our development expenditures, we're actively containing costs, and we're enhancing liquidity across every aspect of our operations.

We will however ensures that we are judicious about 2020 expenditures by pausing spend on new early stage development projects.

We deferred approximately $150 million in hard and soft development costs from a base of 500 million dollar budget.

That being said, we again is going to continue our important intensification. One the program to live is obvious benefits, including improving the profile of our portfolio, adding net asset value and diversifying our sources of cash flow.

In addition to effectively managing our development expenditures were actively competing cough and we're enhancing liquidity across every aspect of our operation.

Jonathan Gitlin: Amongst other cash management initiatives, we've identified close to CAD 1 million per month in operating expense and efficiency improvements for the duration, at least, of the current state of restricted operations, close to CAD 35 million in municipal tax and HST deferrals, a more than 60% reduction in the 2020 revenue enhancing CapEx budget, and we've also made temporary staffing level adjustments as appropriate. While diligently taking measures to enhance our liquidity, as always, RioCan continues to listen to the immediate and long-term needs of our tenants. For example, we announced yesterday that we plan to enhance the shopping experience at our centers across Canada through the launch of Curbside Collect. The program is designed to respond to the evolving retail landscape by offering a safe and convenient way for retail tenants and consumers to transact curbside as businesses reopen.

Must other cost management initiatives, we've identified close to a million dollars per month, and operating expense and efficiency improvement for the duration at least at the current state of restricted operation.

Close to 35 million in municipal tax on each a feeder for all I'm more than 60% reduction in the 2020 revenue enhancing capex budget and we've also made temporary staffing level jobs as appropriate.

Well below the diligently taking measures to an ample liquidity as always real can't continues to listen to the immediate and long term. These from tenants. For example, we announced yesterday that we plan to enhance the shopping experience and our centers across Canada. After the launch of curbside collect the program designed to respond to the evolving kind of we have a retail.

Landscape by offering a safe and convenient way for retail tenants and consumers to transact curbside as business has reopened.

Jonathan Gitlin: Longer-term, Curbside Collect is expected to make it easier for merchants and shoppers to coordinate transactions on a regular basis, improve margins for RioCan tenants by mitigating costs associated with those last mile logistics, and drive consumer traffic and repeat visits. In closing, we're operating more efficiently than we ever have before, and we're gonna apply these learnings going forward. Our healthy first quarter results are a testament to the inherent strength of our portfolio, our tenant mix, and our experienced team. We're confident that these strengths are gonna support us as we steer RioCan through the COVID-19 crisis, and continue to deliver sustainable net asset value and FFO growth as the landscape normalizes. Thank you very much for joining, and I'm gonna turn it over to Qi Tang, who will tell you a little bit more about the financial strength and disciplined capital approach supporting our success.

Longer term current cycle like is expected to make it easier for merchants and shoppers to coordinate transactions on regular basis improved margins for riocan, Kevin by mitigating cost associated with those last mile logistic and drive consumer traffic and repeat business.

In closing, we're operating more efficiently than we ever had before and we're going to apply these learnings going forward are healthy first quarter results are a testament to the inherent strength of our portfolio, our tenant mix and our experienced team and we're confident that these strengths are going to support us as we see a rare cancer. The cokemaking crisis and continued to deliver sustainable net asset value.

Human epidermal growth as the landscape normalized.

Thank you very much for joining and I'm going to turn it over to cheating, who will tell you a little bit more about the financial strength and disciplined capital approach supporting our success treat.

Jonathan Gitlin: Chi.

Qi Tang: Thank you, Jonathan, and good morning, everyone. As Jonathan highlighted, RioCan reported strong Q1 results. FFO increased by CAD 2.4 million compared to Q1 last year. We achieved this despite the dilutive impact of CAD 306 million dispositions, CAD 7.7 million lower transaction gains from equity accounted investments, CAD 4.8 million lower residential inventory gains, and CAD 3.9 million lower lease termination and other fee income. Such dilutive factors were more than offset by our strong same-property NOI growth, NOI from acquisitions and completed developments, higher residential rental NOI, higher other income, and lower G&A expenses. FFO per unit was CAD 0.46 for Q1. The Trust FFO payout ratio was 77.4%. This was a 50 basis point improvement over Q1 last year.

Thank you Jonathan and good morning, everyone.

As it goes in hindsight is real can reported strong first quarter results.

That's helpful increased by 2.4 million compared to Q1 last year.

We achieved today, despite the dilutive impact of 306 million installation.

Some point 7 million lower transaction gain from equity accounting investment.

Well point 8 million lower Residentially inventory gain.

And 3.9 in lower lease termination and other fee income.

Such that when these factors were more than offset by our strong same property NOI girls and NOI from acquisition uncompleted evolving.

I have a residential rental.

Hi, or other income and lower GMI expense.

I feel pretty much was 46 cents for the first quarter.

<unk> coal payout ratio was 77.4%.

It was a 50 basis points improvement over Q1 last year.

As of March 31st 2020, our call photos average net rent per occupied square footage was $19, a 77 cents to support our commercial portfolio.

Qi Tang: As of 31 March 2020, our portfolio's average net rent per occupied sq ft was CAD 19.77 for our commercial portfolio. This represents a 3.2% increase over Q1 last year and a compounded rate of 3.5% since 2015. These results continue to demonstrate the increasing quality and strength of our necessity-based urban and mixed-use portfolios. The Trust's net book value per unit was CAD 25.92 as of this quarter-end. This increased by 2.3% over Q1 last year, incorporating a net fair value decrease of CAD 24.3 million during the quarter. The current COVID-19 pandemic had little impact on our Q1 results. However, it is difficult to predict the long-term impact of the pandemic on property valuations as of this quarter-end.

Represents a 3.2% increase over Q1 of last year and compounded annual growth rate of 3.5% since 2015.

These results continued to demonstrate the increasing quality and strength of R&D sets DC urban and makes use of quality.

It's hard not book value per unit was 25 dollar a 92 cents as over this quarter.

<unk> increased by 2.3% over a two one last year.

Incorporating and that's their body equally so when you walk point threemillion during the quarter.

Kurt Cobain 19 damning.

This will impact our first quarter rebound.

However, it is difficult to predict a long term impact of the pandemic property valuation I hope this quarter.

You mean, the various risks and uncertainties as all lines from our idea me.

Qi Tang: Given the various risks and uncertainties as outlined in our MD&A, we have incorporated the present value impact of the 60-day rental deferral that we approved subsequent to the quarter end, as well as estimated tenant vacancies and resulting leasing expenses in our property valuations as of this quarter end. We hope to have more visibility and greater certainty in future quarters in assessing the short-term and long-term impact of the pandemic on property valuations. As we have emphasized in the past, we have not recognized as much incremental fair value gains in our urban major market development pipeline as some peers may have on relative basis. This is the case even though over 50%, or 21.2 million sq ft of our pipeline have zoning approvals or zoning applications submitted. Our zoning entitlements are the highest among our peers.

We have incorporated the present value impact. So that's 60 day rental deferral that we approved subsequent to the quarter ends as well as I said, maybe 10 secrecy and resulting <unk> expenses.

Our property valuation I hope this quarter.

We hope to have more visibility and greater certainty in future quarters in assessing no short term a long term impact of the pandemic on property valuation.

I do we have emphasized in the past.

We have not recognized as much incremental fair value gains in our urban major market development pipeline and some peers may have all been facing.

This isn't the case, even though over 50% all 21.2 million square feet over our pipeline Ive known you approval, although many applications than that.

Our zoning entitlements are the highest among our peers.

I Love this quarter and.

Qi Tang: As of this quarter end, we have recognized a cumulative fair value gain of CAD 165 million for our entire 42 million square feet of development pipeline. Most of the fair value is related to air right sales secured for The Well at FourFifty The Well. It also includes gains realized upon sale of 50% co-ownership to our partners, such as in the case of Sunnybrook Plaza. During the quarter, we extended our pipeline by almost 13 million square feet, primarily through the addition of future phases of existing development potential. Even though we have put a temporary hold on some new or early-stage projects during the current pandemic, we are confident in the long-term value creation of our development program and remain committed to it. Let us now turn your attention to our strong balance sheet and liquidity position.

We have recognized a cumulative thereby gain of 165 me then you are for our entire 42 million square feet off the bottom and pipeline.

Most of the fair value is related to air rights to secure for the well I'd say censored.

It also includes gain realized a policy or 50% co ownership to our partners such as in the piece of Sunnybrook Plaza.

During the quarter, we expanded our pipeline by almost 13 million square feet.

Bribery to the addition of future phases of existing development potential.

Even though we have put a temporary cold on some you all early stage project doing the carbon pandemic.

We have confidence in the long term value creation of argue bomb pull one.

We remain committed to it.

That's just now turn your attention to our strong balance sheet, our liquidity position.

Our dog March 31st 2020.

Qi Tang: As of 31 March 2020, we had CAD 1 billion liquidity in the form of cash and cash equivalents, and undrawn line of credit. Our unencumbered assets stood at CAD 9.2 billion, generated 60.9% of our annualized NOI, and provided 222 times coverage for our unsecured debt. Our debt to adjusted EBITDA was 8.2 times, and debt to total assets was 43%. Excluding the CAD 1.4 billion development balance on our book, our debt to adjusted EBITDA ratio would have been 6.4 times. During the quarter, we issued our inaugural green bond, the first of a Canadian REIT. The green bond is currently included in the Bloomberg Barclays MSCI Green Bond Index.

We had once daily liquidity in the form of cash and cash equivalents.

And I'm to one mine with credit.

Our R&D encumbered active doses at 9.2 billion generated 60.9% of our annualized in Hawaii and provide a 222 times coverage for our unsecured debt.

Our debt to adjusted EBITDA was 8.2.

All right and that's a total assets was 43%.

Excluding the 1.4, beating the bomb in bottoms, our book our debt to adjusted EBITDA ratio would have been 6.4 times.

During the quarter, we issued our inaugural Green bond so first of a comedian right.

The Green Bond is currently including in the Bloomberg Barclays.

I see Yardi Green Bond index.

The 350 million seven year Green bond visa annual coupon read of 2.361%.

Qi Tang: The CAD 350 million seven-year green bond with an annual coupon rate of 2.361% effectively refinanced the CAD 400 million debenture maturities this year. In addition, we only have CAD 126 million in mortgage maturities yet to be refinanced or have refinancing commitments in place. These mortgages all mature in the H2 of this year and are expected to be refinanced in due course. As of this quarter end, we further reduced our floating interest rate debt exposure to 3.5% from 6.4% as of the year-end. We have also lowered our weighted average effective interest rate to 3.35% for our entire debt portfolio from 3.44% as of this year-end. Our debt structure is largely 61% unsecured and 39% secured as of this quarter end.

That seems to be refinanced the 400, many debenture maturities this year.

In addition, we only have 126 million mortgage maturities yet to be used to refinance all have refinancing commitments in place.

These mortgages all mature in the late her harmful then here are not expected to be refinanced in due course.

I Love this quarter and we further reduced our floating interest rate that exposure to 3.5%.

I don't think well corporate center as over the years.

We have also lowered our weighted average effective interest rate to 3.35% already turned that portfolio from 3.44% as of the correct.

Our debt structure is largely 61% unsecured and 39% secured as often as Florida.

These are consistent city disappointing approach to managing our balance sheet and capital structure, we will maintain strong liquidity and financial stress.

Qi Tang: With a consistently disciplined approach to managing our balance sheet and capital structure, we will maintain strong liquidity and financial strength. This will allow us to drive growth in the ever-changing marketplace, as well as to navigate through the current pandemic. With that, I would like to turn the call over to our CEO, Ed, for his closing remarks.

This will allow us to drive growth in the ever TV market place.

Well as to navigate through the current comes out.

Is that.

I'd like to turn the call over time Neil.

Well he for closing remarks.

Oh, Thank you, Jennifer Jonathan and cheap.

Edward Sonshine: Thank you, Jennifer, Jonathan, and Qi. This is certainly a different sort of earnings call in a couple of ways. Number one, we're of course keeping all the physical distancing remote. Hopefully you can hear me well. If I sound like I'm shouting, it's because I probably am shouting. It's certainly different in that way. The second way it's different is that most of you, I suspect, will tend to pay little mind to the Q1 results as they were largely unaffected by the COVID-19 crisis that erupted in mid-March. However, it is worth noting that in addition to providing a solid base for what will be an interesting 2020, it does indicate what RioCan's restructured and slimmed down portfolio is capable of generating in normal times.

Ed Sonshine: Thank you, Jennifer, Jonathan, and Qi. This is certainly a different sort of earnings call in a couple of ways. Number one, we're of course keeping all the physical distancing remote. Hopefully you can hear me well. If I sound like I'm shouting, it's because I probably am shouting. It's certainly different in that way. The second way it's different is that most of you, I suspect, will tend to pay little mind to the Q1 results as they were largely unaffected by the COVID-19 crisis that erupted in mid-March. However, it is worth noting that in addition to providing a solid base for what will be an interesting 2020, it does indicate what RioCan's restructured and slimmed down portfolio is capable of generating in normal times.

So this is certainly a different sort of earnings call.

And a couple ways.

Number one, though well of course, keeping all the physical this from San Ramon. So hopefully you can hear me well, if I sound like Im showing us because I probably I'm sure.

So is certainly different in that way.

But the special waste different is that most of yes, but.

We will tend to pay a little mine to the Q1 results as they were largely unaffected by the cobot 19 crisis and elected in mid March.

However.

It is worth noting that had program that in addition to providing a solid base for what will be an interesting 2020.

It doesn't indicate what really cans restructure and slimmed down portfolio is capable of generating in normal times.

Edward Sonshine: I assure you, normal pre-COVID-19 times will return even though it is often hard to imagine that when most of us are sitting at home doing our best to work remotely and getting very bored in sitting at home. I am a great believer in human nature, and our basic drive is for social interaction. This will resurface much more quickly than the quote, "This will change everything," end of quote, pundits who would have us believe otherwise. Rather than carrying on about my cynicism regarding all the articles about what the post-COVID-19 world will look like, I will simply give you my view of what RioCan will look like in the short term, medium term, and what real estate is actually all about, the longer term. The short term is what the markets and analysts tend to focus on.

Ed Sonshine: I assure you, normal pre-COVID-19 times will return even though it is often hard to imagine that when most of us are sitting at home doing our best to work remotely and getting very bored in sitting at home. I am a great believer in human nature, and our basic drive is for social interaction. This will resurface much more quickly than the quote, "This will change everything," end of quote, pundits who would have us believe otherwise. Rather than carrying on about my cynicism regarding all the articles about what the post-COVID-19 world will look like, I will simply give you my view of what RioCan will look like in the short term, medium term, and what real estate is actually all about, the longer term. The short term is what the markets and analysts tend to focus on.

And I'm sure you.

Normal Prequaled good times well return.

Even though it is often hard to imagine when most of us are sitting at home doing our best to work remotely.

Getting very board in sitting at home.

I have a great believer in human nature.

Basic drivers for social interaction.

This will resurface much more quickly than the quote this will change every they tend to quote hunters, who would have us believe otherwise.

Well rather than carry Monobore my cynicism regarding all the articles about what the host covered will look like I would simply give you my view of where we can look like in the short term medium term and what real estate is actually all about a longer term.

The short term is what the markets and analysts tend to focus.

This is turned into a breakfast analysis, a monthly run collections.

Edward Sonshine: This has turned into a breathless analysis of monthly rent collections. While I understand that people want something they can measure, in my view, it is a relatively unimportant metric unless it is impactful to an entity's cash flow, which in our case, it certainly is not. RioCan's liquidity, as Chi has noted, is in about the best shape it could possibly be with almost CAD 900 million available to draw on our operating line as of yesterday. It's a big number. Even I have trouble saying it. While I understand that people tend to focus on these short-term metrics, as I said, monthly rent payments are not an indicator of what will eventually be collected.

Ed Sonshine: This has turned into a breathless analysis of monthly rent collections. While I understand that people want something they can measure, in my view, it is a relatively unimportant metric unless it is impactful to an entity's cash flow, which in our case, it certainly is not. RioCan's liquidity, as Chi has noted, is in about the best shape it could possibly be with almost CAD 900 million available to draw on our operating line as of yesterday. It's a big number. Even I have trouble saying it. While I understand that people tend to focus on these short-term metrics, as I said, monthly rent payments are not an indicator of what will eventually be collected.

Well I understand that people want something they can measure.

In my view it as a relatively unimportant, but.

Unless it is impactful twin entities casual.

Which in our case, it's certainly as you know.

Rig counts liquidity as GE has noted is above that in about the best gig they could possibly be with almost $900 $900 million big number I didn't have trouble, saying get.

Available to draw on L. operating line as of yesterday.

Wow I understand.

People tend to focus on these short term metrics as Jim.

Monthly rent.

[laughter] are not an indicator.

What will eventually be collected.

Edward Sonshine: As Jonathan took you through a little bit, almost all of the tenants who have simply not paid, as opposed to the mostly smaller tenants who have entered into 60-day deferral arrangements with RioCan, are national covenant retailers whose only escape from eventual payment is to not only lose some of their best locations, but then to be perhaps followed by insolvency. We are confident that virtually all of the tenants we are busy serving default notices upon will indeed pay what they owe under the contract. Let's remember, a lease is a contract, which even though is called a lease. With regard to the smaller tenants that comprise an important 15% of our revenue base, we believe that most of them will survive the 2 or 3 months of closure they are enduring.

Ed Sonshine: As Jonathan took you through a little bit, almost all of the tenants who have simply not paid, as opposed to the mostly smaller tenants who have entered into 60-day deferral arrangements with RioCan, are national covenant retailers whose only escape from eventual payment is to not only lose some of their best locations, but then to be perhaps followed by insolvency. We are confident that virtually all of the tenants we are busy serving default notices upon will indeed pay what they owe under the contract. Let's remember, a lease is a contract, which even though is called a lease. With regard to the smaller tenants that comprise an important 15% of our revenue base, we believe that most of them will survive the 2 or 3 months of closure they are enduring.

As Jonathan took you through a little bit.

Almost all of the tenants who are simply not me as opposed to mostly smaller tenants who have entered into 60 day the full earnings.

Our national Covenant retailers is only escape virtual payment is to not only lose some of their best locations.

Then do we have perhaps followed by installments.

We are confident that virtually all of the tenants were busy serving default notices upon we wouldn't be paid what they'd all under the contract. That's remember at least is a contract which even though it's called in lease.

With regard to the smaller towns that comprise an important 50% of already movies. We believe the most of them will survive the two or three months of closure.

They are doing.

Edward Sonshine: Hopefully, between the deferral arrangements RioCan has offered and the assistance the government's putting into place, virtually all of them will in fact survive. When we are speaking together again in about three months, collections over the Q2 will be reviewed in hindsight, and they will be able to be looked at in a much fuller and better perspective. The medium term, generally one to three years, but in the acceleration of everything caused by this crisis, I think it's best to simply focus on the next nine to 12 months. Clearly, over the next few weeks, retailers will be reopening, and in fact, that is already happening in several provinces. Obviously, those openings do not return us quickly to the old normal.

Ed Sonshine: Hopefully, between the deferral arrangements RioCan has offered and the assistance the government's putting into place, virtually all of them will in fact survive. When we are speaking together again in about three months, collections over the Q2 will be reviewed in hindsight, and they will be able to be looked at in a much fuller and better perspective. The medium term, generally one to three years, but in the acceleration of everything caused by this crisis, I think it's best to simply focus on the next nine to 12 months. Clearly, over the next few weeks, retailers will be reopening, and in fact, that is already happening in several provinces. Obviously, those openings do not return us quickly to the old normal.

Hopefully between that the full arrangements recant has offered and he assistant that systems that governs putting into place virtually all of them will in fact survived.

Well, we're speaking together again about three months collections over the second quarter will be reviewed in hindsight.

And they will be able to be looked at as a month for and better perspective.

The medium term.

Generally one to three years, but an acceleration of everything caused by this crisis I think it's best to simply focused on the next nine to 12 months.

Clearly over the next few weeks retailers will be reopening and in fact that has already happening in several months.

Well, obviously those openings did not recur as quickly to the old norm.

Edward Sonshine: Sanitation, physical distancing, and other safety measures will be required until science or the passage of time takes us to the place where people once again feel safe in a crowded environment. RioCan will adapt to this temporary condition and help our retailers do so as well. A small and first example of this is RioCan's announcement yesterday of our Curbside Collect program, which Jonathan referred to, and which will make it a lot easier for our retailers to satisfy those customers who would prefer not to enter the physical store. As we progress into 2021, I believe matters will start to return to the old normal and the strength of RioCan's portfolio and its locations in our big cities will become obvious. Our continued development programs will be yielding more fruit, and our results will once again reflect the metrics displayed in our Q1.

Ed Sonshine: Sanitation, physical distancing, and other safety measures will be required until science or the passage of time takes us to the place where people once again feel safe in a crowded environment. RioCan will adapt to this temporary condition and help our retailers do so as well. A small and first example of this is RioCan's announcement yesterday of our Curbside Collect program, which Jonathan referred to, and which will make it a lot easier for our retailers to satisfy those customers who would prefer not to enter the physical store. As we progress into 2021, I believe matters will start to return to the old normal and the strength of RioCan's portfolio and its locations in our big cities will become obvious. Our continued development programs will be yielding more fruit, and our results will once again reflect the metrics displayed in our Q1.

Imitation physical distances and other safety measures will be required until science or the passage of time takes us to the place where people once again feel safe and a crowded environment.

We can will adapt to this temporary condition and help our retailers do so as well.

Small and first example of this is weekends announcement yesterday of our curbside collect program with Johnson, I referred to and which will make it a lot easier for our retailers to satisfy those customers who would prefer not to enter the physical store.

But as we progress into 2021.

I believe matters will start to return to the old model and the strength of recast portfolio and dislocations and our big cities will become obvious.

Our continued development programs will be you'll be more fruit.

And our results will once again reflect the metrics displayed in our first quarter.

Edward Sonshine: RioCan has a portfolio of irreplaceable properties, and as Canada returns to normalization and for many years thereafter, these properties will continue to yield income and development opportunities. The market has reduced the equity value of RioCan by over 40% in a very short time. That resulting disconnect between our real value and the trading price has not been as great since 2009. Unless one believes that the situation prevailing over the last couple of months is going to last for many, many years, it is actually inexplicable. While there is no doubt that 2020 will be a challenging year, RioCan has encountered them before. In 2008, the financial crisis. 2015, with Target vacating nearly 3 million sq ft of RioCan space. In 2017, Sears bankruptcy.

Ed Sonshine: RioCan has a portfolio of irreplaceable properties, and as Canada returns to normalization and for many years thereafter, these properties will continue to yield income and development opportunities. The market has reduced the equity value of RioCan by over 40% in a very short time. That resulting disconnect between our real value and the trading price has not been as great since 2009. Unless one believes that the situation prevailing over the last couple of months is going to last for many, many years, it is actually inexplicable. While there is no doubt that 2020 will be a challenging year, RioCan has encountered them before. In 2008, the financial crisis. 2015, with Target vacating nearly 3 million sq ft of RioCan space. In 2017, Sears bankruptcy.

Well you can have a portfolio moment irreplaceable properties and has carried over in terms of normalization and for many years. Thereafter. These properties will continue in yield income and development opportunity.

The market has reduced the equity value recamier over 40% in a very short time.

That this could they are resulting disconnect between our real happy and trading price has not been us great since 2009.

I'm less water believes that the situation prevailing over the last couple of months, there's going to last for many many years is actually in a split.

Well, there's no doubt that 2020 will be a challenging year recap doesn't count with them before.

2008 financial crisis, 2015, with target vacating nearly 3 million square feet recant space.

And in 2017 Sears bankers.

Edward Sonshine: That's not to mention all the smaller bankruptcies that are just part of the retail landscape these days. From each of these crises, RioCan has emerged stronger, and that will be the case once again. Before I finish, I want to commend our executives and the entire RioCan team for the incredible job they have done. No reporting date changes or delay in our unfortunately to be virtual AGM, a movement to re-remote work, and all while dealing with the mandated closure of about 60% of our tenants. Not to mention a whole new set of facts and ever-changing regulations on every construction site that we have underway. All while dealing with municipalities, many of whom are not quite ready to work remotely, to keep our multiple rezoning applications moving along. All in all, I am extremely proud of them.

Ed Sonshine: That's not to mention all the smaller bankruptcies that are just part of the retail landscape these days. From each of these crises, RioCan has emerged stronger, and that will be the case once again. Before I finish, I want to commend our executives and the entire RioCan team for the incredible job they have done. No reporting date changes or delay in our unfortunately to be virtual AGM, a movement to re-remote work, and all while dealing with the mandated closure of about 60% of our tenants. Not to mention a whole new set of facts and ever-changing regulations on every construction site that we have underway. All while dealing with municipalities, many of whom are not quite ready to work remotely, to keep our multiple rezoning applications moving along. All in all, I am extremely proud of them.

That's not the mentioned all the smaller bankruptcies or they are just part of the retail landscape.

For me should these crises recant has emerged stronger and that will be the case once again.

Before I finish I want to commend our executives in the entire read campaign pretty incredible job they have done.

No reporting date changes or delay in our and our unfortunately to be virtual ATM a movement to run a remote work and all while dealing with the mandated closure of about 60% of our attendance.

Not to mention a whole new set of facts and ever changing regulations on every construction site that we have underway.

All while dealing with municipalities many of whom are not quite ready to local locally to keep our multiple rezoning applications moving along.

All in all I'm extremely proud.

Edward Sonshine: It is their competence, skills, and adaptability that continue to allow me to be so confident about RioCan's short, medium, and long-term future. Thank you, and I'd like to open it up now for questions.

Ed Sonshine: It is their competence, skills, and adaptability that continue to allow me to be so confident about RioCan's short, medium, and long-term future. Thank you, and I'd like to open it up now for questions.

It is their confidence skills, how does that facility that continue to allow me to be so confident about weekend short medium and long term future. Thank you and I'd like to open it up now for questions.

Thank you, ladies and gentlemen, you'll have a question at this time.

Operator 3: Thank you. Ladies and gentlemen, if you have a question at this time, please press star then the number one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. One moment for our questions. Our first question comes from the line of Dean Wilkinson of CIBC. Your line is open.

Operator: Thank you. Ladies and gentlemen, if you have a question at this time, please press star then the number one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. One moment for our questions. Our first question comes from the line of Dean Wilkinson of CIBC. Your line is open.

Please press Star then the number one on your Touchtone telephone. If your question has entered or you wish to remove yourself on the Q. Please press the pound ski my mum for a question.

And our first question comes a lot of deemed Wilkinson of see RBC. Your line is open.

Thanks, Good morning, everybody.

Dean Wilkinson: Thanks. Morning, everybody.

Edward Sonshine: Morning.

Ed Sonshine: Morning.

Turning away.

Dean Wilkinson: Welcome to my dining room. Ed, I wholeheartedly agree with your comment on, you know, the focus on, you know, the monthly rent collections leading to a reckless analysis. You know, the market seems to be saying, "Well, that rent that you didn't collect is a permanent impairment to NOI, so we. The value gets knocked down by that much." You know, which obviously doesn't make sense. I think something that's going to get tested here, in a couple of sort of ensuing months for your tenants is ability versus willingness. I think that you kind of alluded to this in an earlier media interview, saying it's going to be gloves off for those tenants. When you look at that 28% who hasn't paid, how do you determine sort of a willingness versus ability?

Welcome to my dining room.

[laughter].

I certainly agree with your comment on on the focus on the monthly went collections leading to a reckless analysis.

The market seems to be saying well that rent that you didnt collectors, a permanent impairment to analyze so we tell you gets no no by that much.

Obviously doesn't make sense.

I think somebody who's gonna get testing here.

In the couple of ensuing months.

For your tends to stability versus willingness and I think that youve kind of alluded to this and I know earlier immediately enter view.

And it's going to be gloves off for those tenants when you look at that 28% who hasn't hey.

How do you determine sort of a willingness persons ability and is there an opportunity in there I guess now that we're past the purpose of May should go back and reclaim some of the more desirable space for tenants you may have Doug, Doug, Doug Appeals and or could can they remedy the situation and in three months. This is you know we're gonna be talking about sort of killed the next issue that we.

Dean Wilkinson: Is there an opportunity in there, I guess now that we're past the first of May, to go back and reclaim some of the more desirable space for tenants who may have dug their heels in? Or can they remedy the situation and in three months this is, you know, we're gonna be talking about sort of, you know, the next issue that we all face?

All face.

Edward Sonshine: That was a long question, but a good one. I think for the first several weeks of April, RioCan took the view that, you know what, this is an unprecedented situation. We're not going to press our tenants. In some, you know, there is a lack of availability. What became very clear as we moved towards the end of April, in some, it was just a lack of willingness, where they just said, "You know what? I'd rather use your balance sheet, RioCan, to finance this interruption in my revenue than I would my own.

Our money a that that was a long question, but a good one.

Ed Sonshine: That was a long question, but a good one. I think for the first several weeks of April, RioCan took the view that, you know what, this is an unprecedented situation. We're not going to press our tenants. In some, you know, there is a lack of availability. What became very clear as we moved towards the end of April, in some, it was just a lack of willingness, where they just said, "You know what? I'd rather use your balance sheet, RioCan, to finance this interruption in my revenue than I would my own.

I think for the first several weeks of April.

We can't took the view that.

You know what this is Larry Unprecedent said, a situation I, we're not going to press our tenants.

In some you know there is a lack of availability, but what became very clear as we move towards the end of April and zone. It was just a lack of willingness where they just said you know what I'd, rather here's your balance sheet, a rig can to a finance business interruption in mind.

Revenue, a then I wouldn't my home and I'd, rather keep mind for what I needed when I got a resupply my stores and.

Edward Sonshine: I'd rather keep mine for when I need it, when I got to resupply my stores." There was a real lack with many of the national retailers to even engage in conversation. That's what led us to, as we rolled towards the end of the month, to what you referred to as our, and perhaps I've referred to, as our gloves-off attitude. We know some tenants, it's a question of availability. You know, we know some tenants won't survive this.

Ed Sonshine: I'd rather keep mine for when I need it, when I got to resupply my stores." There was a real lack with many of the national retailers to even engage in conversation. That's what led us to, as we rolled towards the end of the month, to what you referred to as our, and perhaps I've referred to, as our gloves-off attitude. We know some tenants, it's a question of availability. You know, we know some tenants won't survive this.

There was a real walk with with many of the national retailers to eat engage a in conversation.

So that's what led us to as we roll towards the end of a month to what you referred to as our and perhaps I've referred to as are the ones off.

I would you.

And we're going to we we know some patterns. It's it's a question of availability.

You know.

We know sometimes warm survivals.

Edward Sonshine: Generally, what our experience has been, and I think you're already seeing it playing out, is the tenants who have actually been in trouble for the last 2 years, and they're often, quite frankly, in the apparel business, they're not gonna survive, or they're gonna survive it in a very diminished, restructured form. We understand that. Hopefully, there will be very few. Apparel actually accounts for, I think, just about 8% of our overall revenue, so they're not all gonna go, that's for sure. It will have an impact, and generally, they're small stores and something we can deal with. The nice thing about our default notice is that we are still in the process of sending.

Ed Sonshine: Generally, what our experience has been, and I think you're already seeing it playing out, is the tenants who have actually been in trouble for the last 2 years, and they're often, quite frankly, in the apparel business, they're not gonna survive, or they're gonna survive it in a very diminished, restructured form. We understand that. Hopefully, there will be very few. Apparel actually accounts for, I think, just about 8% of our overall revenue, so they're not all gonna go, that's for sure. It will have an impact, and generally, they're small stores and something we can deal with. The nice thing about our default notice is that we are still in the process of sending.

Generally what our experience has been.

I think you're already seeing that playing out is the tenants who have actually been in trouble for last two years and they're often quite frankly in the apparel business.

They're not going to survive or they're going to survive in a very diminished restructured for we understand.

Hopefully they'll be very few apparel actually accounts for I think just about 8% to my overall revenue so.

They're not all good goals that's for sure. So it but it will have an impact them generally they're small stores and something we can do it.

We are taking now that the nice thing about our default notices that we are still in a post this ascending because as you can imagine with our portfolio and necessity to get rights with each lease a it's a cumbersome lengthy process, but it's getting done.

Edward Sonshine: Because as you can imagine, with our portfolio and the necessity to get it right with each lease, it's a cumbersome, lengthy process, but it's getting done. Where they have gone out, at a very minimum, we've gotten the unwilling tenants' attention. You know, we're currently engaged in discussions with virtually every tenant to whom we've sent default notices. Based on the progress of those discussions, the reasonableness of those discussions, and we will take into account the particular situation of those tenants, and we'll take into account whatever government programs are ultimately available to assist both the landlord and the tenant in the situation.

Ed Sonshine: Because as you can imagine, with our portfolio and the necessity to get it right with each lease, it's a cumbersome, lengthy process, but it's getting done. Where they have gone out, at a very minimum, we've gotten the unwilling tenants' attention. You know, we're currently engaged in discussions with virtually every tenant to whom we've sent default notices. Based on the progress of those discussions, the reasonableness of those discussions, and we will take into account the particular situation of those tenants, and we'll take into account whatever government programs are ultimately available to assist both the landlord and the tenant in the situation.

Where they have gone out.

I had a very minimum we've gotten mean unwilling to patterns attention.

And you know we're currently engaged in discussions with a with virtually every tenant there only that tend to volumes.

Based on the.

[noise] progress are those discussions are reasonableness of those discussions and we will take into account. The particular situation I thought was tenants as well take into account whatever government programs are ultimately available to assist pulled the landlord and agenda.

Well, we will also a wherever we you know don't feel that tenants are being forthright with us or being.

Edward Sonshine: We will also, where we, you know, don't feel that tenants are being forthright with us or being, you know, reasonable in their approach, we will not hesitate to exercise the remedies that are available to us once the grace period's under default notices, and they all have differing, although not all different, but, you know, sometimes it's 10 days, sometimes 15 days. It depends on the specific lease. When those grace periods are gone, yeah, I'd be less than forthright if I didn't tell you that, number one, we will be exercising remedies. Number two, I'd be less than forthright if I didn't tell you that there are certain locations that we very much wouldn't mind getting back.

Ed Sonshine: We will also, where we, you know, don't feel that tenants are being forthright with us or being, you know, reasonable in their approach, we will not hesitate to exercise the remedies that are available to us once the grace period's under default notices, and they all have differing, although not all different, but, you know, sometimes it's 10 days, sometimes 15 days. It depends on the specific lease. When those grace periods are gone, yeah, I'd be less than forthright if I didn't tell you that, number one, we will be exercising remedies. Number two, I'd be less than forthright if I didn't tell you that there are certain locations that we very much wouldn't mind getting back.

You know reasonable in their approach.

We will not hesitate to exercise the revenues there were available to us once the grace periods under the phone. This isn't they all have differing oh no different puts you know sometimes it then they sometimes 15 days it depends on the specific lease.

When those grace periods, our our.

[noise] gone.

Yeah, I'd be less than Fourq right. If I didn't tell you that number one we will be exercising remedies and number two I'd be less component and then tell you is there are certain locations that we very much wouldn't mind getting back now that may be because we haven't development that's.

Edward Sonshine: Now, that may be because we have a development that would be facilitated to move faster if that particular tenant was gone, or it's an under-market rent in some of our fantastic urban locations where we know there's higher and better users that would snap up that space. You know, it's a very complicated process. It's one we wanna do sensitively to our tenants because at the end of the day, they're our tenants. They're our source of revenue, and you know, we wanna treat them right as best we can, but we don't wanna be taken advantage of. To this point, I think our good nature may have been taken advantage of by some retailers. I'm not gonna name anybody specific anymore. I got myself in enough trouble with that.

Ed Sonshine: Now, that may be because we have a development that would be facilitated to move faster if that particular tenant was gone, or it's an under-market rent in some of our fantastic urban locations where we know there's higher and better users that would snap up that space. You know, it's a very complicated process. It's one we wanna do sensitively to our tenants because at the end of the day, they're our tenants. They're our source of revenue, and you know, we wanna treat them right as best we can, but we don't wanna be taken advantage of. To this point, I think our good nature may have been taken advantage of by some retailers. I'm not gonna name anybody specific anymore. I got myself in enough trouble with that.

Would be facilitated the move faster if that particular time was gone or it's under market rent.

In some of our fantastic urban locations, where we know.

There is higher and better users that would snap up that that space. So you know it's a very complicated process. It's what we wanted to do sensitive linked.

To our attendance because candidates are there aren't happens there source of revenue and you know we want to treat them right as best we can.

But we don't want to be taken advantage of and we certainly to this point I think are good nature may have been taken advantage of my summary, there works I'm not going to name anybody specific anymore I got myself, and then well with that and Oh I hope that answers your question.

Edward Sonshine: I hope that answers your question, Dean.

Ed Sonshine: I hope that answers your question, Dean.

Oh, absolutely does.

Dean Wilkinson: Absolutely, it does. I guess a follow-on maybe for Chi then. In how you account for this, as you said, you expect to recover all, if not most of this, you're gonna continue to book this as revenue through the income statement, and I guess it becomes a tenant receivable. Then perhaps sometime down the road, if you know, as you say, there's gonna be certain tenants who do fail from this and there will be an allowance for doubtful accounts. But we may not see that till well into the latter part of the year or perhaps into 2021. Is that how we should be thinking about that, Chi?

I guess a follow on maybe for Ci then in how you account for that.

But as you said you expect to to recover all if not most of that's you're going to continue to book. This has revenue through the income statement and I guess it becomes a a attendant receivables and then perhaps sometime down the road. If if you know as you as you say that there's going to be certain tenants who.

Pete you failed from Nelson and there will be an allowance for doubtful accounts, but we may not see that until well into the latter part of your perhaps in the 2021 should is that how we should be thinking about that cheap.

Well.

Qi Tang: Well, I think we will have to do our assessment on that potential bad debt allowance as early as actually Q2. By that time, we will have more information, more visibility. We couldn't really say, you know, whether that will be the case or what the magnitude will certainly. As part of our reporting process, that's where we will go through internally.

I think we will have to do our assessment on that potential that data alone.

I've heard yes, I should Q2.

By that time, we'll have more information on me Divinity, we couldn't really see you know whether that will be lucky so what's the magnitude certainty, but as part of our reporting process. That's when we were culturally internally.

Okay, Great. That's it for me I will hand, it back for some others. Thanks, everyone.

Dean Wilkinson: Okay, great. That's it for me. I will hand it back for some others. Thanks, everyone.

And our next question comes my up having pair of RBC capital markets. Your line is open.

Edward Sonshine: Thank you.

Ed Sonshine: Thank you.

Operator 3: Our next question comes from Neil Downey of RBC Capital Markets. Your line is open.

Operator: Our next question comes from Neil Downey of RBC Capital Markets. Your line is open.

Thanks, and good morning, just maybe building off of deems last question. There I guess Richie just again with respect to bad debts.

Neil Downey: Thanks, good morning. Just maybe building off of Dean's last question there, I guess for Chi. Just again, with respect to bad debt, can you comment on the process by which you assess collectibility? Then, you know, just again, do you intend to actually provide disclosure on the amount of bad debts going forward?

Pammi Bir: Thanks, good morning. Just maybe building off of Dean's last question there, I guess for Chi. Just again, with respect to bad debt, can you comment on the process by which you assess collectibility? Then, you know, just again, do you intend to actually provide disclosure on the amount of bad debts going forward?

Can you comment on the process by which you assess collectability and then.

It just again clarify that you intend to do you intend to actually provide disclosure on the amount to about bad debts going forward.

Yes, we do I mean, that's part of our regular disclosure process in terms a whole we assess you find to be ready it'll be tenant by tenant. We look at you know use our management. That's just my based on the information available on them and make that judgment call and of course as part of the.

Qi Tang: Yes. We do. I mean, that's part of our regular disclosure process. In terms of how we assess, effectively really it will be tenant by tenant. We look at, you know, use our management's best judgment based on the information available then and make that judgment call. Of course, as part of the upcoming reporting cycle, we will disclose the information accordingly.

Coming reporting cycle, we will disclose information accordingly.

Edward Sonshine: Tommy, it's really not complicated. You know, there's some clear markers. If somebody goes insolvent, then other than what we're gonna recover through the insolvency, which is typically limited to three months, you know, you're gonna write anything more than that off. You do eventually get it back. We still got some money coming in from Sears, believe it or not, two years later, which we'll probably get positive because I think we did already write it off. But that's in the larger tenant world. In the smaller tenant, it's not that different.

Ed Sonshine: Tommy, it's really not complicated. You know, there's some clear markers. If somebody goes insolvent, then other than what we're gonna recover through the insolvency, which is typically limited to three months, you know, you're gonna write anything more than that off. You do eventually get it back. We still got some money coming in from Sears, believe it or not, two years later, which we'll probably get positive because I think we did already write it off. But that's in the larger tenant world. In the smaller tenant, it's not that different.

Probably it's it's really not complicated and you know there's some clear markers if somebody goes in Solomon.

Then or other than what we're going.

Recovered through the insolvency, which typically three more limited for three months.

You're a younger you're going to write anything more than that off Oh, you do eventually get it back we're still we still got some money coming in from Sears leader two years later, which will probably be a positive because I think we did already ready to Hawaii, but the.

And then that's in the larger tendon world and the smaller tenant it's not that different I mean, if somebody has got one stores kind of mid Pac movie, you're going to pick your security deposit.

Edward Sonshine: I mean, if somebody has got one store, has got a midnight move, you're gonna take your security deposit and, you know, if they're not able to reopen, you will judge what kind of covenant you have and whether it's appropriate or worth it, to go after them in the legal system. You're gonna make a judgment on each of those situations. Right now, you know, even though we haven't taken any write-downs because it's really too early, and, you know, if I was a little optimistic, I'd say, "We're gonna collect it all." That's the attitude that we actually go into this collection process with.

Ed Sonshine: I mean, if somebody has got one store, has got a midnight move, you're gonna take your security deposit and, you know, if they're not able to reopen, you will judge what kind of covenant you have and whether it's appropriate or worth it, to go after them in the legal system. You're gonna make a judgment on each of those situations. Right now, you know, even though we haven't taken any write-downs because it's really too early, and, you know, if I was a little optimistic, I'd say, "We're gonna collect it all." That's the attitude that we actually go into this collection process with.

And you know for not able to reopen you will judge what kind of comment you have and whether it's appropriate or worth it to.

To go after them in the legal system, and then you're going to make a judgment on each of those situations, but right now you know even though we haven't taken any any write downs give this week and a you know I was a little optimistic I said, we're going to collect at all and that's the attitude.

We actually go into this collection process, where.

Neil Downey: Right.

Pammi Bir: Right.

Right.

Edward Sonshine: By July, August, by the end of June, as we're you know preparing those Q2 reports, we will have a pretty good idea, whereas today we don't.

Ed Sonshine: By July, August, by the end of June, as we're you know preparing those Q2 reports, we will have a pretty good idea, whereas today we don't.

Hi July August as we're a by the end of June as were you know comparing the second quarter reports, we will have a pretty good idea, whereas today, we don't.

Right.

Neil Downey: Right.

Pammi Bir: Right.

Qi Tang: Yeah, of course, the pandemic doesn't affect Q1, so for Q1 reporting, we don't have much of a receivable beyond the normal.

Fuel the pandemic doesn't affect Q1, so for Q1 reporting we don't have much of a receivable not at all.

Okay.

Got it.

Neil Downey: Got it. Just, you know, going back to your comments about apparel, Ed, you know, in light of Reitmans liquidity concerns, I guess, issued last week and the Gap as well, can you just comment on, you know, what approach you're taking with respect to their leases within your portfolio?

Pammi Bir: Got it. Just, you know, going back to your comments about apparel, Ed, you know, in light of Reitmans liquidity concerns, I guess, issued last week and the Gap as well, can you just comment on, you know, what approach you're taking with respect to their leases within your portfolio?

But you going back to your comments about apparel and you know what might have remains liquidity concerns I guess issued last week and the gap is welcome can you just comment on you know what approach you're taking with respect to do the least their leases within your portfolio.

Edward Sonshine: I mean, we're treating them right now just like any other tenant. I mean, if one watched the Reitmans stock, again, not a big surprise. I think this is a stock that several years ago traded at CAD 10, and pre-pandemic was trading at CAD 0.50. Clearly, I think it's gone down from there, unfortunately. You know, our larger tenants help, and happily, they're not nearly as big a tenant for us as they used to be. They're much smaller. Most of the locations they occupy for us are in the big cities. A couple right here at Yonge-Eglinton Centre, or I guess one they gave up.

No I don't think we wanted to I mean, we're treating them right now just like any other tenants.

Ed Sonshine: I mean, we're treating them right now just like any other tenant. I mean, if one watched the Reitmans stock, again, not a big surprise. I think this is a stock that several years ago traded at CAD 10, and pre-pandemic was trading at CAD 0.50. Clearly, I think it's gone down from there, unfortunately. You know, our larger tenants help, and happily, they're not nearly as big a tenant for us as they used to be. They're much smaller. Most of the locations they occupy for us are in the big cities. A couple right here at Yonge-Eglinton Centre, or I guess one they gave up.

I mean, if one Washington Friedman stock again, not a big surprise I think this is no stock that several years ago created a $10 and pre pandemic was trading at 50 cents. So clearly.

I think it's gone down from there Unfortunately, and I know our larger tenants Allison and.

Happily there, they're not nearly as big of tenant for us as they used to be.

They are much smaller and that most of the locations they occupied for us or are in the big cities. A couple right here at young Davidson or I guess, the one for one they give off.

Edward Sonshine: We will go to continue on the process even with a tenant who is clearly in some distress, and that will be largely in the apparel industry, until there's, you know, God forbid, a trustee appointed, then we deal with the trustee in the normal process. There's well-established processes for all these things. What's so unprecedented is to have, you know, so many large tenants suddenly say, "We're not paying because our stores are closed." You know, I get that, and we're working our way through it.

In a a you know so oh, we will go to continue on the process, even with a tenant who is clearly in some distress.

Ed Sonshine: We will go to continue on the process even with a tenant who is clearly in some distress, and that will be largely in the apparel industry, until there's, you know, God forbid, a trustee appointed, then we deal with the trustee in the normal process. There's well-established processes for all these things. What's so unprecedented is to have, you know, so many large tenants suddenly say, "We're not paying because our stores are closed." You know, I get that, and we're working our way through it.

And that will be largely in the apparel industry until there's a a young god forbid a trustee appointed that we deal with addressed in the normal forces. There is well established processes for all these things. It's I mean, what someone precedent that is to have you know so many large tenants suddenly say, we're not paying.

Because our stores and closed and no or I guess and we're working our way through it.

Got it maybe just one last one for me you made some comments with respect to how you're approaching the valuation of your properties can can you just provide perhaps some context around you know how your assumptions are evolving.

Neil Downey: Got it. Maybe just one last one for me. You made some comments with respect to how you're approaching, you know, the valuation of your property. Can you just provide perhaps some context around, you know, how your assumptions are evolving, as we work through, you know, the next, over the balance of this year?

Pammi Bir: Got it. Maybe just one last one for me. You made some comments with respect to how you're approaching, you know, the valuation of your property. Can you just provide perhaps some context around, you know, how your assumptions are evolving, as we work through, you know, the next, over the balance of this year?

As we work through you know the next Oh <unk> bounce for this year.

Oh, Yeah, I mean, obviously, there's two variables and every valuation is probably more than that but I would say there there's oh free that we're going to look.

Edward Sonshine: Yeah. I mean, obviously there's 2 variables in every valuation. There's probably more than that, but I would say there's about 3 that we're gonna look at. Number 1 is the cap rate, and obviously we didn't really change much in the way of cap rates, if anything. I'm not really part of that valuation process. I just see the results. I'm not in the room, so to speak. But that didn't change much. I mean, there's just been no precedent that transactions that have taken place really since this COVID-19 situation started. Everybody says there's very few. I haven't seen hardly any. The other part is NOI, and I think that's probably what you're driving at.

Ed Sonshine: Yeah. I mean, obviously there's 2 variables in every valuation. There's probably more than that, but I would say there's about 3 that we're gonna look at. Number 1 is the cap rate, and obviously we didn't really change much in the way of cap rates, if anything. I'm not really part of that valuation process. I just see the results. I'm not in the room, so to speak. But that didn't change much. I mean, there's just been no precedent that transactions that have taken place really since this COVID-19 situation started. Everybody says there's very few. I haven't seen hardly any. The other part is NOI, and I think that's probably what you're driving at.

Number one is a cap rate and obviously, we didn't really change much in the wake cap rates, if anything I'm not getting part of that valuation for Hasbro process I just see the results are not in the room so to speak.

But that didn't change much I mean, a there's just been no precedent that transactions that have taken place really since this cobrand situation start everybody says, there's very few I haven't seen hardening. The other part is analog and I think that's probably what you're driving yet.

Edward Sonshine: We made some very small impairment assumptions on NOI at the end of Q1 on the assumption that a certain percentage of our independent tenants would not make it. Whether that's a good assumption or bad assumption, I have a feeling we'll know three months from now. We make certain assumptions based on what we see going on as to what's gonna happen with certain tenants. Are they gonna survive? If they're not, how long is it gonna take to re-lease the space? What's gonna be the cost of re-leasing that space? It's a pretty involved property-by-property process. And we will start going through that intensively, I suspect, in June. Happily, it appears that most, if not all of Canada, will be reopened in some fashion within a month.

Made some very small impairment assumptions on how why at the end of the first quarter on the assumption that a certain percentage of our independent tenants would not make it.

Ed Sonshine: We made some very small impairment assumptions on NOI at the end of Q1 on the assumption that a certain percentage of our independent tenants would not make it. Whether that's a good assumption or bad assumption, I have a feeling we'll know three months from now. We make certain assumptions based on what we see going on as to what's gonna happen with certain tenants. Are they gonna survive? If they're not, how long is it gonna take to re-lease the space? What's gonna be the cost of re-leasing that space? It's a pretty involved property-by-property process. And we will start going through that intensively, I suspect, in June. Happily, it appears that most, if not all of Canada, will be reopened in some fashion within a month.

Whether that's a good or something or bad assumption I was feeling we'll know three months from now so we make certain assumptions based on what we see going on as to what's going to happen with certain tenants are they going to survive if they're not how long is going to take the release the space, what's going to be the cost that we leasing that space.

It's a pretty involved property by property process.

And we will start going through that intensively I suspect in June happily. It appears that most if not all of Canada, a will be reopened in some fashion within a month. So we'll have a pretty good idea what's going on by the end of June.

Edward Sonshine: We'll have a pretty good idea of what's going on by the end of June. The third metric that Chi touched on, but I'd like to emphasize a little bit, we've created more zoned redevelopment space, residential, office, on our own sites than any of our peers. Unlike many of our peers, we haven't valued it as part of our valuation process until there was a transaction to trigger. Whether that transaction, as Chi mentioned, was the actual sale of air rights at The Well or at Fifth and Third, which, I'm sure some you know, it was always almost a pleasant surprise, shows you the quality of people we deal with, where that sale of air rights actually closed at the end of March in Calgary.

Ed Sonshine: We'll have a pretty good idea of what's going on by the end of June. The third metric that Chi touched on, but I'd like to emphasize a little bit, we've created more zoned redevelopment space, residential, office, on our own sites than any of our peers. Unlike many of our peers, we haven't valued it as part of our valuation process until there was a transaction to trigger. Whether that transaction, as Chi mentioned, was the actual sale of air rights at The Well or at Fifth and Third, which, I'm sure some you know, it was always almost a pleasant surprise, shows you the quality of people we deal with, where that sale of air rights actually closed at the end of March in Calgary.

And the third.

You know a metric that you touched on I'd like to emphasize hopefully.

We've created more zone zone.

Redevelopment space residential office on our own sites than any of our peers. Unlike many of our peers we haven't value.

As part of there are up Rs valuation process until there was a transactions trigger.

And you know whether that transaction as gene mentioned was the actual sale of air rights as well or fifth third which.

I'm sure some you know.

It was always plot almost a pleasant surprise chosen of all these people and deal with where that sale of air rights actually closed at the end of March in caliber or it's a sale of a 50% interest to a partner.

Edward Sonshine: It's a sale of a 50% interest to a partner, like Killam or Boardwalk or many of the other partners, you know, experienced pros that we deal with. We then value our remaining half at what we sold the other half for. Other than that, we haven't written it up. Many of our peers do, and writing those up and really reflecting a fair value is something we're gonna look at as we look through the year because we think we're actually doing ourselves and our investors a disservice by taking that extremely conservative attitude. How much that will be, I don't know, and we're gonna again do it very cautiously and on a property-by-property basis. Those are the three factors that we basically use.

Ed Sonshine: It's a sale of a 50% interest to a partner, like Killam or Boardwalk or many of the other partners, you know, experienced pros that we deal with. We then value our remaining half at what we sold the other half for. Other than that, we haven't written it up. Many of our peers do, and writing those up and really reflecting a fair value is something we're gonna look at as we look through the year because we think we're actually doing ourselves and our investors a disservice by taking that extremely conservative attitude. How much that will be, I don't know, and we're gonna again do it very cautiously and on a property-by-property basis. Those are the three factors that we basically use.

Let Kelly Luttmer boardwalk or many of the other part that you know experienced frozen we deal with a we then value our remaining.

At what we sold the other half way for.

Other than that.

We don't we haven't written enough many of our peers do and writing those up and really reflecting a fair value. It's something we're going to look at as we walk through the year, because we think we're actually doing ourselves and our investors a disservice by taking that extremely conservative attitude.

You know, which I will be I don't know and we're going to again do a very cautiously had a property by property basis. So those are the three factors that we basically use a you know I'm sure the guys, who actually do it could probably and other things, but that's that's in general and Jonathan Arnold you and having better G. No.

Edward Sonshine: You know, I'm sure the guys who actually do it could probably add other things. But that's in general. Jonathan, I don't know if you wanna add anything to that, or Chi?

Ed Sonshine: You know, I'm sure the guys who actually do it could probably add other things. But that's in general. Jonathan, I don't know if you wanna add anything to that, or Chi?

Jonathan Gitlin: No, I think you hit the nail on the head, Ed. There's not much we can add to that.

Thank you hit the nail them.

There's not much pretty massive out.

Edward Sonshine: Okay.

Ed Sonshine: Okay.

Okay, Yes.

Neil Downey: Mm-hmm.

Jonathan Gitlin: Mm-hmm.

Edward Sonshine: I got it. We're in agreement. Thank you, Neil Downey.

Ed Sonshine: I got it. We're in agreement. Thank you, Neil Downey.

Okay.

We're going agreement thank you Bobby.

Neil Downey: Thanks very much. I'll turn it back.

Pammi Bir: Thanks very much. I'll turn it back.

Thanks, very much well turn it back.

And your next question comes up that Damiani TD Securities. Your line is open.

Operator 3: Our next question comes from Sam Damiani of TD Securities. Your line is open.

Operator: Our next question comes from Sam Damiani of TD Securities. Your line is open.

Thanks, Good morning, everyone I'm, just maybe to start off on on the tenant retention this quarter, 83%, Israel low, especially I think we've seen since 2016 I don't want to read too much into the course, just a quarter, but you know what is it just depends make having an early impact or was it was there anything on unused.

Sam Damiani: Thanks. Good morning, everyone. Just maybe to start off on the tenant retention this quarter, 83% is the lowest I think we've seen since 2016. I don't wanna read too much into it, of course, just a quarter. You know, is this the pandemic having an early impact, or was there anything unusual that sort of hit leasing, you know, perhaps in March?

All that sort of hit it leasing.

Perhaps at work.

[music].

Well a pure Juan.

Jonathan Gitlin: Well, on Pier 1, there were a couple of small-

Couple of a smaller pension prevention is renewals right, okay, sorry renewals, notably there was anything extraordinary that happened this quarter.

Edward Sonshine: Retention is renewals, isn't it?

Ed Sonshine: Retention is renewals, isn't it?

Jonathan Gitlin: Mm-hmm. Right. Okay. Sorry, renewals. No, I don't think there was anything extraordinary that happened this quarter.

Edward Sonshine: Now, most of these renewals, you got to appreciate that, Sam, they're six months ahead of the actual renewal date. I would be surprised if, in fact, I'm almost sure the pandemic had nothing to do with that. Unfortunately, just quarter to quarter, it depends who comes up, what rent we're asking, if it's a very profitable store for them, if we have a better use for it. Actually, what I've been pleasantly surprised, and I don't know, I'm not getting to a view of Q2 numbers on this, is that in the middle of this pandemic, we're still getting lots of renewals, sign-ups, and new leasing on stores that are currently closed. I'm actually pleasantly surprised on that.

Ed Sonshine: Now, most of these renewals, you got to appreciate that, Sam, they're six months ahead of the actual renewal date. I would be surprised if, in fact, I'm almost sure the pandemic had nothing to do with that. Unfortunately, just quarter to quarter, it depends who comes up, what rent we're asking, if it's a very profitable store for them, if we have a better use for it. Actually, what I've been pleasantly surprised, and I don't know, I'm not getting to a view of Q2 numbers on this, is that in the middle of this pandemic, we're still getting lots of renewals, sign-ups, and new leasing on stores that are currently closed. I'm actually pleasantly surprised on that.

Most of these renewals you had appreciate that Sam there's six months ahead of the actual annuity.

So I would I wouldn't be surprised if in fact, I I'm I'm sure. The pandemic had nothing to do with that Unfortunately this quarter to core fans, who comes up what of rents were asking if it's a very profitable store for them. If we have a better use for actually what I've been present pleasant leased.

Fries, and ironically, I'm not getting to a view of second quarter numbers on this is that in the middle of this pandemic, we're still getting lots of renewals and sign ups and new leasing.

On stores that are currently close so I am actually pleasantly surprised on that and that's a quite frankly one of the reason that leads me to believe very strongly that they're very few retailers. So we're just saying I'm out of business.

Edward Sonshine: That's, quite frankly, one of the reasons that leads me to believe very strongly that there are very few retailers who are just saying, "I'm out of business.

Ed Sonshine: That's, quite frankly, one of the reasons that leads me to believe very strongly that there are very few retailers who are just saying, "I'm out of business.

So what you know I don't know jumps in the line, but would you say you're leasing velocity.

Sam Damiani: You know, I don't have Jeff on the line, but would you say your leasing velocity, you know, in some ways hasn't changed? Like, how has it changed, I guess, you know, in the last two months?

You know in some ways hasn't changed in other words like how has it changed I guess you know when the last two months.

Edward Sonshine: Well, you know, again, I'll turn that over to Jonathan, but I think it would be. It changed because nobody's meeting anybody. Nobody's seeing anybody to get a tour of a site which typically tenants want to have. It is unusual today.

Ed Sonshine: Well, you know, again, I'll turn that over to Jonathan, but I think it would be. It changed because nobody's meeting anybody. Nobody's seeing anybody to get a tour of a site which typically tenants want to have. It is unusual today.

Well, you know again, I'll turn that over Jonathan but I think it would be a it would be I mean has it changed because nobody is meeting anybody nobody seeing anybody to get a tour of a site, which typically tenants want to have it.

It's unusual today, but.

Jonathan Gitlin: Yeah.

Edward Sonshine: Go ahead, Jonathan.

Ed Sonshine: Go ahead, Jonathan.

I would tell you offered a board pause I think that there is simply a lot of deals that we were working on that had been put on pause for a small period of time and tenants have acknowledged that but they will ramp up their operations and pay for the field as soon as things do return I mean their business operations returned to a bit more of a normal state, but we have not.

Jonathan Gitlin: I would say the operative word is pause. I think that there are simply a lot of deals that we were working on that have been put on pause for a small period of time, and tenants have acknowledged that they will ramp up their operations and pay for these deals as soon as things do return, I mean, their business operations return to a bit more of a normal state. We have not seen a lot of deals dropped, which is something entirely different. We do believe that given the strength of our portfolio, there will still be activity on our available spaces.

Seem a lot of deals drops which is something entirely different so we do believe but given the strength of our portfolio there will still be activity on our available space.

Okay. That's helpful and did you say and your comments that the tenants representing 60% of rents are closed right. Now is is that the freight did I hear correctly.

Sam Damiani: Okay, that's helpful. Did you say, Ed, in your comments that tenants representing 60% of rents are closed right now? Is that? Did I hear correctly?

Edward Sonshine: Yeah. It's roughly correct. About 40% of our, and I'm calculating by revenue rather than space.

Ed Sonshine: Yeah. It's roughly correct. About 40% of our, and I'm calculating by revenue rather than space.

I know, it's roughly correct about 40% of our and I'm I'm calculating by revenue rather than space.

Sam Damiani: Yeah.

Edward Sonshine: which is not always the same thing, but the revenue numbers are actually more important to us than the square footage.

Ed Sonshine: which is not always the same thing, but the revenue numbers are actually more important to us than the square footage.

Which probably is the same thing, but the revenue numbers are actually more important wasn't offend anybody away from the fact is it about sales didn't go down on or about 40% of our of our revenue base is what I'd call essentially.

Jonathan Gitlin: It relates around the same.

Edward Sonshine: Is it about the same? Thank you, Jonathan.

Ed Sonshine: Is it about the same? Thank you, Jonathan.

Jonathan Gitlin: It's about around.

Edward Sonshine: Yeah. About 40% of our revenue base is what I'd call essential. They're, you know, carrying on business. About 60% isn't considered essential. Funny thing is, they're carrying on business in different ways. Even though restaurants are closed, it's quite remarkable to me how, particularly as April turned into May, how they've ramped up their takeout and delivery business. You know, as I'll speak for myself, as great a cook as my wife is, you know, you get tired, and you want to have food delivered. I think that's happening with a lot of people. There are more and more takeout and delivery things happening. They're in business.

Ed Sonshine: Yeah. About 40% of our revenue base is what I'd call essential. They're, you know, carrying on business. About 60% isn't considered essential. Funny thing is, they're carrying on business in different ways. Even though restaurants are closed, it's quite remarkable to me how, particularly as April turned into May, how they've ramped up their takeout and delivery business. You know, as I'll speak for myself, as great a cook as my wife is, you know, you get tired, and you want to have food delivered. I think that's happening with a lot of people. There are more and more takeout and delivery things happening. They're in business.

And and there you know there that are carrying on business.

About 60% isn't a considered essential funny thing is they're carrying on business in different ways.

Even though restaurants are close it's quite remarkable to me, how particularly as April turns into may how they've ramped up there a their takeout and delivery business.

And you know as Oh I'll speak for myself as great. A coke is my wife is you know when you get tired and you want to have food [laughter] and I think that's happening with a lot of people are more and more of a pickup and delivery things happened. So every business there's a lot of.

Edward Sonshine: There's a lot of business being done on the Internet by regular retailers. I mean, again, I'll speak for me. As the odd time when I actually leave my little lair, you know, I walk through the lobby of the condominium building I live in, and the number of boxes sitting there are quite incredible. I'll ask the concierge, I say, "Is that today's delivery?" He said, "No, this afternoon's. We've already delivered out this morning's." But a surprising number to me of those boxes are for retailers. They're from Sephora. Now, I'm not sure why somebody needs about a, you know, 2-foot by 2-foot box of cosmetics, but, you know, to each his own. They're from The Bay. They're from Indigo.

Ed Sonshine: There's a lot of business being done on the Internet by regular retailers. I mean, again, I'll speak for me. As the odd time when I actually leave my little lair, you know, I walk through the lobby of the condominium building I live in, and the number of boxes sitting there are quite incredible. I'll ask the concierge, I say, "Is that today's delivery?" He said, "No, this afternoon's. We've already delivered out this morning's." But a surprising number to me of those boxes are for retailers. They're from Sephora. Now, I'm not sure why somebody needs about a, you know, 2-foot by 2-foot box of cosmetics, but, you know, to each his own. They're from The Bay. They're from Indigo.

Business are being done on the Internet.

By regular retailers I mean again Vicki.

<unk> as a the uptime and I actually read my little layer.

You know I walk through the lobby have been condominium building I I live in as a number of boxes sitting there are quite incredible and Alaska comes here as I said is that today's deliveries, but not this afternoons would already [laughter] warrants, but it's surprising number to me of those boxes.

Our for retailers there from so forth I'm not sure why somebody needs about a.

Two foot by two foot blocks of cosmetics, but you know.

Oh, there from the Bay I've ever from Indigo, there from all kinds of retailers that are.

Edward Sonshine: They're from all kinds of retailers that are closed, but they're doing some amount of business. Obviously, not the amount they would be if they were open. You know, I always look for silver linings. I think the silver lining for our brick-and-mortar retailers out of this pandemic is going to be that they are all going to be upping their e-commerce abilities. We've been hearing this from our retailers. It's part of the reason Jonathan and his team came up with the RioCan Curbside Collect program because we could witness in our own properties how, you know, the amount of order and pick it up is quite incredible, not just from food. I drove by our Lawrence Allen beautiful building, actually.

Ed Sonshine: They're from all kinds of retailers that are closed, but they're doing some amount of business. Obviously, not the amount they would be if they were open. You know, I always look for silver linings. I think the silver lining for our brick-and-mortar retailers out of this pandemic is going to be that they are all going to be upping their e-commerce abilities. We've been hearing this from our retailers. It's part of the reason Jonathan and his team came up with the RioCan Curbside Collect program because we could witness in our own properties how, you know, the amount of order and pick it up is quite incredible, not just from food. I drove by our Lawrence Allen beautiful building, actually.

Close.

What they're doing some amount of business, obviously not the amount they would be if they were open but you know.

I always look for silver linings.

And I think the silver lining for our brick and mortar retailers out of this a pandemic.

His wife to be that they are all going to be upping their.

E Commerce abilities, its part and we've been hearing this from Murray goes as part of the recent Jonathan's gene came up with the rig can curbside collect program because we could witness in our own properties or how you know it could be the amount of ordering pick it up.

It is quite incredible not just from food I drove by our Lawrence Alan a beautiful Golden actually and I couldn't believe the hard work going on and this was last Saturday.

Edward Sonshine: I couldn't believe the havoc going on, and this was last Saturday, in the parking lot. Since I know there's a Fortinos obviously that's open, but they're at the back of the shopping center, so these people weren't going to Fortinos. There's a Dollarama, which I know is open, but they're sort of at the other end of the building. These people are going to Canadian Tire, and Canadian Tire wasn't open at that moment. So they were all doing order and pick up. There had to be 50 cars snaking around because it really wasn't set up very well for it. When Jonathan and his team mentioned to me this idea for actually striping out areas, putting up proper signs and so on in the Curbside Collect, I said, "You know what?

Ed Sonshine: I couldn't believe the havoc going on, and this was last Saturday, in the parking lot. Since I know there's a Fortinos obviously that's open, but they're at the back of the shopping center, so these people weren't going to Fortinos. There's a Dollarama, which I know is open, but they're sort of at the other end of the building. These people are going to Canadian Tire, and Canadian Tire wasn't open at that moment. So they were all doing order and pick up. There had to be 50 cars snaking around because it really wasn't set up very well for it. When Jonathan and his team mentioned to me this idea for actually striping out areas, putting up proper signs and so on in the Curbside Collect, I said, "You know what?

In the in the park in line.

Since I know, there's a 14 goes obviously that's open but they're at the back of the shopping center. So these people work going on for deals. There's a dollar grandma, which I got was open but there's sort of every other into the building. These people are going to Canadian tire Kintyre wasn't open at that moment.

They were all doing order and pick up and there has to be 50 cars, making around because it really wasn't set up pretty well so in Jonathan as Dean mentioned to me. This idea for actually striking out areas, putting up a proper science and so on the curbside, but like I said you know what it's.

Edward Sonshine: It's brilliant. You know, let's start rolling it out across the country, and let's see what else we can do. I think the silver lining will be the greater use of e-commerce by bricks-and-mortar tenants who their e-commerce platform is built around that bricks-and-mortar facility, which is used. It makes returns a lot easier. It makes immediate gratification a lot easier, even if you're afraid to go in the store, which there will be a minority of people who are afraid to go into any store till this is 100% over. I think everybody understands that. There'll probably be an equal minority who are unafraid to do anything. The vast majority will be where they, you know, they wanna be careful, but they're not gonna give up their entire life to be careful.

Ed Sonshine: It's brilliant. You know, let's start rolling it out across the country, and let's see what else we can do. I think the silver lining will be the greater use of e-commerce by bricks-and-mortar tenants who their e-commerce platform is built around that bricks-and-mortar facility, which is used. It makes returns a lot easier. It makes immediate gratification a lot easier, even if you're afraid to go in the store, which there will be a minority of people who are afraid to go into any store till this is 100% over. I think everybody understands that. There'll probably be an equal minority who are unafraid to do anything. The vast majority will be where they, you know, they wanna be careful, but they're not gonna give up their entire life to be careful.

Good.

No less started rolling it out across the country and let's see what else. We can do so I think the silver lining will be.

The greater use of E commerce by bricks and mortar depends who their ecommerce platform is built around that bricks and mortar facility, which is used to it makes with terms a lot easier. It makes immediate gratification a lot easier even if you haven't you're afraid to go.

In the store, which there will be a minority of people who are free to go into any store to list is 100% over.

I think everybody understands it will probably be an equal minority, who who aren't afraid to do anything and the vast majority will be [laughter], where they you know they want to be careful but they're not going to give up their entire life I could be careful.

Edward Sonshine: I think that's a silver lining. I think the other silver lining is because of the overuse of delivery services. You know, the big gorilla, whose name I hate to mention, called Amazon. You know what? Their delivery and shipping is a bit not up to what it used to be.

So I think that's a silver lining and I think the other silver lining is because of the or use of Oh delivery services. Oh, you know the big Gorilla, whose name I hate dimension called Amazon.

Ed Sonshine: I think that's a silver lining. I think the other silver lining is because of the overuse of delivery services. You know, the big gorilla, whose name I hate to mention, called Amazon. You know what? Their delivery and shipping is a bit not up to what it used to be.

You know what they're they're delivering and shipping is is a bit.

Not a for what it used to me.

Jonathan Gitlin: Yeah.

Edward Sonshine: Is what I'm hearing from everybody?

Ed Sonshine: Is what I'm hearing from everybody?

And there is what I'm hearing you remember, yeah, and everything there bricks and mortar profile, while and I think you're also seem to further that's common beyond just click and collect you're seeing a lot of these be stores. These retailers use their existing bricks and mortar location as a film and sound, meaning that they are having deliveries not from your suburban fulfillment centers, but they're actually.

Jonathan Gitlin: Yeah. They're increasing their bricks-and-mortar profile as well. I think you're also seeing, just further to Ed's comment, beyond just click and collect, you're seeing a lot of these stores, these retailers use their existing bricks-and-mortar locations as fulfillment centers, meaning that they are having deliveries not from their suburban fulfillment centers. They're actually using the stores as the source for the delivery because it's much cheaper and much easier for them. These stores are taking on. They're evolving. They're taking on a new meaning for these retailers. The one thing that's for certain, though, these retailers would be loath to give them up because they are so well-positioned in penetrating neighborhoods that it would be so inefficient for them to give up those locations.

He's going to sport as the source for the delivery because it much cheaper and much easier for them. So these stores are taking on their evolving that taking on a new meaning for these retailers. The one thing that for certain though these retailers would be load to give them up because they're so well positioned and penetrating mark neighborhood that it would just be it would be so.

Inefficient for them to be about those locations and so that's why I'm really are seeing this in the accelerated a enhancement of its omni channeling principal and I think that means that there's a lot of relevance and increased relevance for these bricks and mortar out but yeah. That's a great add Jonathan Oh, I'll, just give a little a west coast.

Jonathan Gitlin: That's why we really are seeing this accelerated enhancement of this omni-channeling principle. I think that means that there's a lot of relevance and increased relevance for these bricks-and-mortar outlets.

Edward Sonshine: Yeah. No, that's a great add, Jonathan. I'll just give a little last close, 'cause I can't help it, to that. The one Whole Foods we own, and then Whole Foods is, of course, owned by Amazon, is half of it's a distribution center at this point, if you go to the one we have on Bayview, north of Eglinton. Not just distribution center, it's really being primarily used as a order online and pick it up, which is unusual for Amazon. The other supermarkets are obviously doing the same thing now. You know, they're big enough boys, they accommodate themselves. In our various conversations with CEOs of the supermarket chains and the drugstore chains, their entire growth strategy is built around bricks and mortar.

Ed Sonshine: Yeah. No, that's a great add, Jonathan. I'll just give a little last close, 'cause I can't help it, to that. The one Whole Foods we own, and then Whole Foods is, of course, owned by Amazon, is half of it's a distribution center at this point, if you go to the one we have on Bayview, north of Eglinton. Not just distribution center, it's really being primarily used as a order online and pick it up, which is unusual for Amazon. The other supermarkets are obviously doing the same thing now. You know, they're big enough boys, they accommodate themselves. In our various conversations with CEOs of the supermarket chains and the drugstore chains, their entire growth strategy is built around bricks and mortar.

As I can't help it to that one a whole foods, we know the whole foods is of course owned by the by Amazon.

Is half of its a distribution center at this point of view if you go to the one we have on babies in North American women and [noise].

Not just distribution center, it's really being.

Primarily use as a order online and pick it up which is unusual friends on and and the other supermarkets are obviously doing the same thing now and a and you know there big enough Boise accommodate themselves, but a in our various conversations with a C O.

As of.

Supermarket chains in the drugstore chains.

Their entire growth strategy is built around bricks and mortar.

Edward Sonshine: Having said that, they're all investing in e-commerce. They're investing in distribution warehouses. They know the critical part, not only do people wanna pick up food and pick it themselves, but having that last mile distribution center, as Jonathan described it, is critical to them being able to compete with the Amazons and the Walmarts of this world.

Ed Sonshine: Having said that, they're all investing in e-commerce. They're investing in distribution warehouses. They know the critical part, not only do people wanna pick up food and pick it themselves, but having that last mile distribution center, as Jonathan described it, is critical to them being able to compete with the Amazons and the Walmarts of this world.

Having said that they're all investing in ecommerce or investing in distribution warehouses, but they know the critical part.

Not only that people want to pick up food and pick it themselves.

But having that last model distribution center as John described it is critical to then being able to compete with the Amazon's in the wall margins.

Thank you, saying that's great question would thank you Sir.

Operator 3: Thank you, Sam.

Ed Sonshine: Thank you, Sam.

Jonathan Gitlin: That's great.

Edward Sonshine: The question was.

Ed Sonshine: The question was.

Jonathan Gitlin: Thank you.

Next question comes a lot of Joanne Rodriguez Your line is open.

Operator 3: Our next question comes from the line of Jenny Ma. Your line is open.

Operator: Our next question comes from the line of Jenny Ma. Your line is open.

Oh.

Jenny Ma: Yeah. Hi. There's an article in The Globe and Mail Friday, about a group led by the pension funds, but also including yourself and I believe SmartCentres, along with some of the larger retailers seeking a plan in discussions with the government whereby you guys would abate, you guys, meaning the, you know, the landlords would abate a third of the rent, and the government would loan the other two-thirds. You know, I realize the final details haven't been put out yet on the kind of the government's plan on dealing with larger tenants. But I was wondering if you can confirm if that's a program that you guys would be amenable to. You know, what percentage of the portfolio...

[Analyst]: Yeah. Hi. There's an article in The Globe and Mail Friday, about a group led by the pension funds, but also including yourself and I believe SmartCentres, along with some of the larger retailers seeking a plan in discussions with the government whereby you guys would abate, you guys, meaning the, you know, the landlords would abate a third of the rent, and the government would loan the other two-thirds. You know, I realize the final details haven't been put out yet on the kind of the government's plan on dealing with larger tenants. But I was wondering if you can confirm if that's a program that you guys would be amenable to. You know, what percentage of the portfolio...

Yeah, Hi, there there's an article in the Golden Mail Friday I'm about to a group led by the pension funds, but also including yourself and I believe smart centers, along with some larger retailers seeking a plan in discussions with the government whereby you guys would abate. So you guys, meaning you know the landlords.

Bait third if the right.

And the government and would love any other to surge.

And you know I realize a final details haven't been put out yet on the <unk> kind of the government's plan on doing with larger tenants, but I'm. Just wondering if you can confirm a shift that's a program that you guys would be amenable to and then you know what percentage of portfolio I realize it might be small, but you know.

Jenny Ma: I realize it might be small, but, you know, what percentage of the portfolio would fall under that bucket?

[Analyst]: I realize it might be small, but, you know, what percentage of the portfolio would fall under that bucket?

What percentage of the portfolio would fall into that that bucket.

Edward Sonshine: Sure. We were indeed part of the group. We actually started probably about five weeks ago on this, but nothing moves quickly. We put together a proposal that essentially, you're correct, in exchange for certain tenants paying us in cash two-thirds of the rent, gross rent, which would in effect be not loaned to them specifically by the government, but in exchange for the government giving them larger loans, which would not just be for rent, but would be available for their own capital purposes. But first, we would essentially be guaranteed the rent. It's for a limited period of time, essentially through to the end of this year. The number of tenants that ultimately. Again, I have no idea what the government's gonna come up with.

Oh sure we were indeed part of the group a we actually started probably about a five weeks ago.

Ed Sonshine: Sure. We were indeed part of the group. We actually started probably about five weeks ago on this, but nothing moves quickly. We put together a proposal that essentially, you're correct, in exchange for certain tenants paying us in cash two-thirds of the rent, gross rent, which would in effect be not loaned to them specifically by the government, but in exchange for the government giving them larger loans, which would not just be for rent, but would be available for their own capital purposes. But first, we would essentially be guaranteed the rent. It's for a limited period of time, essentially through to the end of this year. The number of tenants that ultimately. Again, I have no idea what the government's gonna come up with.

But nothing moves quickly we bring put together proposal.

That essentially you're correct the in exchange for certain tenants.

Paying us in cash two thirds of the rent a gross rent which wouldn't affect happy.

Not want to them, specifically by the government, but in exchange for the government, giving them larger ones, which would not just be for rents will probably be would be available for their own capital.

The first we would an essentially be guaranteed the rent it for a limited period of time essentially through the end of this year.

And the number of tenants that ultimately and again I have no idea of what the government is going to come up.

Edward Sonshine: I've been involved in some subsequent conversations, but certainly not all of them. As anybody who's dealt with government knows, these things take a lightning round unless they start getting put through various policy considerations, budget considerations, and many other considerations, including just public policy. We do expect something to happen as early as this week, but I don't know what it's gonna look like. As part of the original proposal, it was fairly punitive to the tenants, the retailers that were seeking those loans.

Ed Sonshine: I've been involved in some subsequent conversations, but certainly not all of them. As anybody who's dealt with government knows, these things take a lightning round unless they start getting put through various policy considerations, budget considerations, and many other considerations, including just public policy. We do expect something to happen as early as this week, but I don't know what it's gonna look like. As part of the original proposal, it was fairly punitive to the tenants, the retailers that were seeking those loans.

I've been involved in some subsequent conversations will certainly not all of them.

And as a anybody who's done with government.

Knows these things take a late [noise].

I was asking about <unk>.

This policy considerations and budget considerations and many other considerations, we just public policy.

Says that they put everything through.

We do expect something to happen as early as this week.

But the I. I don't know, what's gonna look like as part of the original proposal it was fairly punitive.

To the tenants.

At the retailers are there were seeking those loans and in many kids. So you know for example, not only did they have to not have dividends are being paid I did not only did they have to stop any buybacks at least in the original proposal and this was put forth body.

Edward Sonshine: In many cases, you know, for example, not only did they have to not have dividends being paid, not only did they have to stop any buybacks, at least in the original proposal, and this was put forth by the retailers themselves, the executives had to take pay cuts. Obviously the number of tenants who, or retailers who, are gonna put themselves through that process are retailers who don't have any choice. I suspect that will be a relatively small number, but they will be important ones. You know, obviously they will be amongst the ones who are totally shut down. I talked about, you know, people are doing a certain amount of their business over the Internet. Well, there are certain tenants like gyms.

Ed Sonshine: In many cases, you know, for example, not only did they have to not have dividends being paid, not only did they have to stop any buybacks, at least in the original proposal, and this was put forth by the retailers themselves, the executives had to take pay cuts. Obviously the number of tenants who, or retailers who, are gonna put themselves through that process are retailers who don't have any choice. I suspect that will be a relatively small number, but they will be important ones. You know, obviously they will be amongst the ones who are totally shut down. I talked about, you know, people are doing a certain amount of their business over the Internet. Well, there are certain tenants like gyms.

Retailers themselves the executives have to take big gosh.

So obviously the number of tenants who are retailers, who we're going to listen so so that process, our retailers, who don't have any troughs I suspect that will be a relatively small number but they will be important ones and you know obviously, there will be amongst the ones who are totally shut.

That I talked about you know people are doing certain amount of their business over the internet well there are there certain tenants like gyms.

Edward Sonshine: Yeah, perhaps an individual trainer can make a little money, doing sessions over the Internet, but the gyms are closed. Not only are they closed, it's gonna be a bit of a ramp up, for them. We know that. They know that. They're gonna need those government loans. There's probably a handful of sectors. I think it'll be quite limited. There will be a handful of sectors, and it will be up to the landlords to choose, quite frankly, which tenants you're prepared to do that with for that limited period of time. If we feel a tenant has no chance to survive, you know, we'd rather just take back the space and re-lease it. Most of the quality tenants that we deal with, you know, think they will survive.

Yeah, perhaps an individual trainer can make up the money doing sessions over the internet, but the gyms are close and not only out a close.

Ed Sonshine: Yeah, perhaps an individual trainer can make a little money, doing sessions over the Internet, but the gyms are closed. Not only are they closed, it's gonna be a bit of a ramp up, for them. We know that. They know that. They're gonna need those government loans. There's probably a handful of sectors. I think it'll be quite limited. There will be a handful of sectors, and it will be up to the landlords to choose, quite frankly, which tenants you're prepared to do that with for that limited period of time. If we feel a tenant has no chance to survive, you know, we'd rather just take back the space and re-lease it. Most of the quality tenants that we deal with, you know, think they will survive.

It's kind of be a bit about ramp up.

Oh for them.

We know that they know that they're going to need those government loans and there's probably.

A handful of sectors I think it'll be quite limited, but there will be a handful of sectors and there will be up for the landlords to choose quite frankly, which tenants you're prepared to do that.

For that limited period of time, if we feel that tenant has no chance to survive.

We'd rather just pick back the space to meet Lisa.

Most of the quality tenants that we deal with we you know things they will survive some of them iconic Canadian names.

Edward Sonshine: Some of them are iconic Canadian names, and they have great brands. They just need a little help from government and from us getting through this. To the extent we enter into those, obviously we would take a reserve immediately, for what we agreed to not collect for the remainder of this year. It's one of the many reasons, Joanne, that I believe I made the comment 2020 will be not only a challenging year, but an interesting one, where you're almost creating real partnerships between some landlords and some tenants.

Ed Sonshine: Some of them are iconic Canadian names, and they have great brands. They just need a little help from government and from us getting through this. To the extent we enter into those, obviously we would take a reserve immediately, for what we agreed to not collect for the remainder of this year. It's one of the many reasons, Joanne, that I believe I made the comment 2020 will be not only a challenging year, but an interesting one, where you're almost creating real partnerships between some landlords and some tenants.

And then they have great brands are they just need a little help from government and from us getting through that to the extent we enter into those obviously, we would take a reserve immediately for what we agreed to knock a like for the remainder of this year. It's one of the many reasons agile and.

Oh go ahead that I believe I made a comment 2020 will be not only a challenging year finding interesting what were you thinking you're almost creating real partnerships between some landlords and sometimes.

Right right. Okay. Yeah, I mean look it's a price it must be shared amongst all stakeholders I know I, just nobody knows yourselves, killing but you know you didn't mention 40% of portfolio being essential services I think and so the bobs what percentage is is.

Jenny Ma: Right. Okay. Yeah. I mean, look, it's a price that must be shared among all stakeholders. You know, I get it. Nobody saw this coming. You know, you'd mentioned 40% of the portfolio being essential services, I think. The balance, what percentage is closed, you know, say like a Cineplex or a gym? What percentage is operating in a limited capacity, say like a restaurant that's open for takeout or, you know, stores that are open for pickup?

[Analyst]: Right. Okay. Yeah. I mean, look, it's a price that must be shared among all stakeholders. You know, I get it. Nobody saw this coming. You know, you'd mentioned 40% of the portfolio being essential services, I think. The balance, what percentage is closed, you know, say like a Cineplex or a gym? What percentage is operating in a limited capacity, say like a restaurant that's open for takeout or, you know, stores that are open for pickup?

You know how close you.

You know say like a cineplex or Jim and then what percentage is operating on a limited kept up capacity say like a restaurant. That's open for takeout or you know <unk> stores that are open for for pick up.

Edward Sonshine: That's a pretty tough measurement. You know, a lot of it is just we happen to know. I mean, until I actually saw boxes from Sephora in my lobby, I didn't know Sephora was effectively operating. All the health and beauty people are operating in certain ways. I can't give you a specific answer, but I would say the ones that are completely closed, the gyms, the Cineplexes probably are no more than 10% to 12% of the overall, and that would probably be the focus, and probably even less than that of this large retailer program when, you know, as a percentage of our revenue base. Not insignificant, but certainly something for us that's quite manageable.

Ed Sonshine: That's a pretty tough measurement. You know, a lot of it is just we happen to know. I mean, until I actually saw boxes from Sephora in my lobby, I didn't know Sephora was effectively operating. All the health and beauty people are operating in certain ways. I can't give you a specific answer, but I would say the ones that are completely closed, the gyms, the Cineplexes probably are no more than 10% to 12% of the overall, and that would probably be the focus, and probably even less than that of this large retailer program when, you know, as a percentage of our revenue base. Not insignificant, but certainly something for us that's quite manageable.

That's a pretty tough measurement Oh, you know a lot of it is just we happened to no I mean, it until actually stopped boxes from some four and my in my lobby I didn't notice before I was effectively offering.

And although you are the health and beauty people are operating in in certain ways. So I can't give you. A then have a specific answer but I would say the ones that are completely closed or the gyms. The cineplex's probably are no more than 10% to 12% of the overall and that would probably.

Maybe the focus and probably even less than that of this large retailer program would have taken as a percentage of our our revenue base so not as significant.

But certainly if something for us that's quite manager and temporary yeah, well of course kind of it'll be for this year and it should enable a these retailers and accordingly ourselves it leave us well a lot less work to do as far as releasing all these practices.

Jenny Ma: Temporary.

Jonathan Gitlin: Temporary.

Edward Sonshine: Yeah. Well, of course temporary. You know, it'll be for this year. It should enable these retailers, and accordingly ourselves. It'll leave us with a lot less work to do as far as re-leasing all these premises.

Ed Sonshine: Yeah. Well, of course temporary. You know, it'll be for this year. It should enable these retailers, and accordingly ourselves. It'll leave us with a lot less work to do as far as re-leasing all these premises.

Okay, Okay, great that's helpful.

Jenny Ma: Okay, great. That's helpful. And then just lastly, you know, I missed the beginning of the call because my one-year-old threw a fit that I wouldn't let her get in the oven with the pizza I was putting in. I apologize if I missed this. What, as of today, was May rent versus April rent, kind of five days in?

[Analyst]: Okay, great. That's helpful. And then just lastly, you know, I missed the beginning of the call because my one-year-old threw a fit that I wouldn't let her get in the oven with the pizza I was putting in. I apologize if I missed this. What, as of today, was May rent versus April rent, kind of five days in?

And then just lastly in and I'm not speaking I would call because my one year old through fit that I wouldn't want to get any other than what the pizza I was putting in so I apologize if I Miss test.

But what I was if today what was may ramp for since April that kind of five Jason you Didnt Miss it because you know what which may have missed it was my comment, saying that I find the whole concentration a month by month.

Edward Sonshine: You didn't miss it because you know what? What you may have missed was my comment saying that I find the whole concentration on month-by-month rent collection to be quite useless. We put out a number on an April rent collection, which it has gotten better since we put those numbers out, as we've started-

Ed Sonshine: You didn't miss it because you know what? What you may have missed was my comment saying that I find the whole concentration on month-by-month rent collection to be quite useless. We put out a number on an April rent collection, which it has gotten better since we put those numbers out, as we've started-

Rent collection to be quite.

Useless and ER and we put out a number on a newborn collection, which it has gotten better since we put those numbers as we just got worse.

Jenny Ma: Right.

[Analyst]: Right.

Oh, we are not going to be issuing month by month I went election numbers because it just doesn't mean anything in our opinion will give you all the numbers at the end of quarter when we always do.

Edward Sonshine: We are not gonna be issuing month-by-month rent collection numbers because it just doesn't mean anything in our opinion. We'll give you all the numbers, at the end of the quarter when we always do.

Ed Sonshine: We are not gonna be issuing month-by-month rent collection numbers because it just doesn't mean anything in our opinion. We'll give you all the numbers, at the end of the quarter when we always do.

Okay fair enough. Thanks, I'll turn it back.

Jenny Ma: Okay. Fair enough. Thanks. I'll turn it back.

[Analyst]: Okay. Fair enough. Thanks. I'll turn it back.

And your next question comes a lot of tally of National Bank. Your line is open.

Edward Sonshine: And-

Ed Sonshine: And-

Operator 3: Your next question comes from the line of Tal Woolley of National Bank. Your line is open.

Operator: Your next question comes from the line of Tal Woolley of National Bank. Your line is open.

Hi, good morning.

Tal Woolley: Hi. Good morning.

Edward Sonshine: Morning, Tal.

Ed Sonshine: Morning, Tal.

Morning.

I think where I wanted to start was just one other thing for such a joy to do during these types of advances scenario planning or you know trying to gain out or how these things sort of play out can you talk to what you're sort of base case operating scenario is over the next year like do you expect.

Tal Woolley: I think where I wanted to start was just, one of the things that's such a joy to do during these types of events is scenario planning, you know, trying to game out, how these things sort of play out. Can you talk to what your sort of base case operating scenario is over the next year? Like, do you expect a second wave of this? Like, how are you thinking? What are sort of the scenarios you are kind of contemplating for the operating environment over the next little while?

Second wave of best like how are you thinking what are the scenarios you are kind of contemplating for the operating environment over the next little while you know obviously, we're not scientists scalp and.

Edward Sonshine: Yeah. Obviously, we're not scientists, Pam, and

Ed Sonshine: Yeah. Obviously, we're not scientists, Pam, and

Qi Tang: Yes.

Tal Woolley: Yes.

I see a but but you're right. We all we all get things and we're all walking around our mass and pure Ralph just like everybody else.

Edward Sonshine: You're right, we all guess things. We're all walking around with our masks and Purell just like everybody else. You know, I made the statement, and I think we're all working on one assumption that at least by the beginning of June, and I think earlier, most of our retailers will be permitted to carry on business. Quite frankly, the scientists, the epidemiologists, and probably most people didn't know there was such a specialty. I did 'cause I actually know an epidemiologist. They've been running Canada for the last two and a half months or two months.

Ed Sonshine: You're right, we all guess things. We're all walking around with our masks and Purell just like everybody else. You know, I made the statement, and I think we're all working on one assumption that at least by the beginning of June, and I think earlier, most of our retailers will be permitted to carry on business. Quite frankly, the scientists, the epidemiologists, and probably most people didn't know there was such a specialty. I did 'cause I actually know an epidemiologist. They've been running Canada for the last two and a half months or two months.

But you know you know I made the statement and I think we're all working on one assumption that's certainly by the beginning of June and I think earlier.

Most of our retailers will be permitted to carry on business.

Frankly, the the scientists be epidemiologists and probably most people didn't know there was such a a specialty I did because actually going epidemiologist.

Who they've been running can.

As for the last two last ones and or two months and a you know quite frankly the.

Edward Sonshine: Quite frankly, the health scenarios, they've sort of gotten a little bit twisted because if we all go back to the middle of March when this started, and I'm on the board of a hospital, so I won't mention which one 'cause I don't wanna be accused of giving out inside information. The whole point of isolation, the whole point of everything, you know, people, you know, hiding in their houses was to prevent the healthcare system from being overwhelmed. It wasn't to eliminate this terrible virus. People were gonna get it. Two things have happened. The bulk of the fatalities in Canada have been in the one place that these scientists never really thought about or the politicians never paid much attention to, which is our long-term care facilities.

Ed Sonshine: Quite frankly, the health scenarios, they've sort of gotten a little bit twisted because if we all go back to the middle of March when this started, and I'm on the board of a hospital, so I won't mention which one 'cause I don't wanna be accused of giving out inside information. The whole point of isolation, the whole point of everything, you know, people, you know, hiding in their houses was to prevent the healthcare system from being overwhelmed. It wasn't to eliminate this terrible virus. People were gonna get it. Two things have happened. The bulk of the fatalities in Canada have been in the one place that these scientists never really thought about or the politicians never paid much attention to, which is our long-term care facilities.

How scenarios.

Sort of gotten a little bit twist, because if we all go back to the.

Middle of March when they start I don't affordable hospital, so I won't mention which one because I don't want to be accused of giving them inside information, but the whole point isolation, a whole point of everything.

People a you know hiding in our houses was to prevent the health care system from being overwhelmed and wanted to eliminate this this terrible virus people, we're gonna get.

And.

Two things about the bulk of the fatalities in Canada have been in one place that these scientists never really thought of it or the politicians never paid much attention to it which is our long term care facilities in Ontario, close to 80% of fatalities I've been in the long term care.

Edward Sonshine: In Ontario, close to 80% of the fatalities have been in the long-term care. If you do the numbers, and I'm not making light of anybody dying, there's probably been about 300 fatalities outside of the long-term care system. It's a big number, but, you know, more people than that die in six weeks of heart disease or cancer. Hospitals, and this is across the board, not just the hospital I happen to be on the board, they never came close to full capacity. Never mind being overwhelmed, they never came close.

Ed Sonshine: In Ontario, close to 80% of the fatalities have been in the long-term care. If you do the numbers, and I'm not making light of anybody dying, there's probably been about 300 fatalities outside of the long-term care system. It's a big number, but, you know, more people than that die in six weeks of heart disease or cancer. Hospitals, and this is across the board, not just the hospital I happen to be on the board, they never came close to full capacity. Never mind being overwhelmed, they never came close.

If you do the numbers and I'm, not making like anybody guy.

There's probably been about 300 fatalities.

Outside of the health care system side of the long term care system.

It's a big number but you know more people than last die in six weeks of heart disease or cancer.

So.

And hospitals and this is across the board not just the hospital after the deal before they never came close.

The full capacity never mind be more well they never came close most hospitals, if you're going to have the easiest thing getting into the yard or getting a bad thing you've had the last 30 years because of they basically stopped all what's called elective although.

Edward Sonshine: Most hospitals, you're gonna have the easiest time getting into the ER or getting a bed than you've had in the last 30 years because they basically stopped all what's called elective, although having stents put in your arteries, I'm not sure why that's elective. Some of my doctor friends feel that more people will probably die from postponed surgeries in Ontario than have died from the coronavirus, again, outside of the long-term care system. I think though they have sufficiently scared the bejesus out of everybody, that people are careful. Have we eliminated community spread? No, obviously not. There are still new cases being developed even or being found, and part of that is 'cause they've ramped up testing to you know.

Ed Sonshine: Most hospitals, you're gonna have the easiest time getting into the ER or getting a bed than you've had in the last 30 years because they basically stopped all what's called elective, although having stents put in your arteries, I'm not sure why that's elective. Some of my doctor friends feel that more people will probably die from postponed surgeries in Ontario than have died from the coronavirus, again, outside of the long-term care system. I think though they have sufficiently scared the bejesus out of everybody, that people are careful. Have we eliminated community spread? No, obviously not. There are still new cases being developed even or being found, and part of that is 'cause they've ramped up testing to you know.

Having having stench, putting neurosurgery, so I'm not sure what selective and so my doctor trends feel that more people will probably died from postpone surgeries.

In Ontario that when that have died from the inclusion of virus again outside of the long term care system.

So.

I think so they have sufficiently scared that Jesus out of everybody that people are carefully.

How do we eliminated community spread no obviously, not there's still new cases being developed even are being phone.

And part of that is because they ramped up testing too you know actually I think Ontario spending pretty amazing job, particularly in the last couple of weeks once premier important got that business due to know ramping of testing somehow it happened so they're doing a lot of it and that would continue so I don't really expect.

Edward Sonshine: Actually, I think Ontario has done a pretty amazing job, particularly in the last couple of weeks. Once Premier Ford got that business piece about ramping up testing, somehow it happened. They're doing a lot of that, and that'll continue. I don't really expect right now a second giant surge. I expect that this disease will be with us until there is an effective vaccine or it somehow disappears 'cause there is no more spread. I think we're gonna see. I mean, again, we're gonna get a bit of a benefit in a backwards way by watching what's happening in the United States. As of today, I think there's 30-odd states that are open. They're open for business. They've opened their parks. They've opened their beaches.

Ed Sonshine: Actually, I think Ontario has done a pretty amazing job, particularly in the last couple of weeks. Once Premier Ford got that business piece about ramping up testing, somehow it happened. They're doing a lot of that, and that'll continue. I don't really expect right now a second giant surge. I expect that this disease will be with us until there is an effective vaccine or it somehow disappears 'cause there is no more spread. I think we're gonna see. I mean, again, we're gonna get a bit of a benefit in a backwards way by watching what's happening in the United States. As of today, I think there's 30-odd states that are open. They're open for business. They've opened their parks. They've opened their beaches.

Right now I I second giant search I expect that this disease will be with us a until there is an effective vaccine or it's somehow disappeared because there is no.

I think we're gonna see I mean again, we're gonna go a bit of a benefit in in a backward swayed by watching whats happening in the United States.

As of today I think there's three off states a that are open or open for business, they've opened or parts of open pit beaches precise.

Edward Sonshine: In a sense, Simon Property Group, I believe, as of yesterday, opened up about 60 of their couple hundred malls in the United States. We're gonna see what happens. I, you know, I mean, Georgia has now been at it for a week, and for whatever we may think of the people governing Georgia, you know. We'll see if there's a big surge there. I think we're gonna be able. We've played out all kinds of scenarios internally, but I think we're gonna have the benefit of getting those scenarios a little more educated over the course of the next two or three weeks by quite frankly seeing what's going on in the United States. We have a shopping center in Prince Edward Island. It's open.

Ed Sonshine: In a sense, Simon Property Group, I believe, as of yesterday, opened up about 60 of their couple hundred malls in the United States. We're gonna see what happens. I, you know, I mean, Georgia has now been at it for a week, and for whatever we may think of the people governing Georgia, you know. We'll see if there's a big surge there. I think we're gonna be able. We've played out all kinds of scenarios internally, but I think we're gonna have the benefit of getting those scenarios a little more educated over the course of the next two or three weeks by quite frankly seeing what's going on in the United States. We have a shopping center in Prince Edward Island. It's open.

Simon I believe as of yesterday opened up about 60 is there a couple hundred malls in the United States. So we're going to see what happens I get a whole I mean, Georgia has now been added for a week or and for whatever we may think I see the.

People governing Georgia.

You know they would be a well see if there's a big surge there. So I think we're gonna be we played out all kinds of scenarios and internally.

But I think we're gonna have the benefit of getting those scenarios a little more educated over the course of the next two or three weeks, but quite frankly see what's going on in the United States. We have a shopping center in Prince Edward Ivan It's over Oh, we have a shopping center just one why don't D. I want a new Brunswick.

Edward Sonshine: We have a shopping center, just one in PEI, one in New Brunswick. It's opening this week, if I'm not mistaken. We have one in Manitoba-

Ed Sonshine: We have a shopping center, just one in PEI, one in New Brunswick. It's opening this week, if I'm not mistaken. We have one in Manitoba-

Its opening this week, if I'm not mistaken we have one in Manitoba opened yesterday, which opened yesterday. So we're getting an early look in our own portfolio Oh. They are all three of those actually had a central seven cents. So they were never totally close.

Qi Tang: Opened yesterday.

Jonathan Gitlin: Opened yesterday.

Edward Sonshine: Which opened yesterday. We're getting an early look in our own portfolio. Now, you know, all three of those actually had essential tenants in it, so they were never totally closed. The difference quite frankly in our malls as opposed to the big fashion malls is they have a pretty good sprinkling of essential tenants. Of all our malls, I think there was maybe one or two that were actually fully closed and now happen to be open, because most of our malls are sort of old school. They have supermarkets in them and other essential retailers. Yeah, we've scenarioed this to death, but again, I think we're gonna have the benefit of very good information coming to us over the course of the next very short time, two or three weeks. I hope I answered your question.

Ed Sonshine: Which opened yesterday. We're getting an early look in our own portfolio. Now, you know, all three of those actually had essential tenants in it, so they were never totally closed. The difference quite frankly in our malls as opposed to the big fashion malls is they have a pretty good sprinkling of essential tenants. Of all our malls, I think there was maybe one or two that were actually fully closed and now happen to be open, because most of our malls are sort of old school. They have supermarkets in them and other essential retailers. Yeah, we've scenarioed this to death, but again, I think we're gonna have the benefit of very good information coming to us over the course of the next very short time, two or three weeks. I hope I answered your question.

The difference quite frankly in our malls as opposed to the big fashion malls is they have a pretty good sprinkling of a central tenant so a mall or malls I think there was maybe one or two that will actually fully close them and not because of the open because most of our models are sort of old school they have supermarkets.

And other essential retailers, so I got a week scenario this to death, but again I think we're going to have the benefit a very good information coming to us over the course of the next virtual back two or three.

I hope I answered your question.

Qi Tang: Okay. Just on the-

Tal Woolley: Okay. Just on the-

Okay.

<unk>.

Tal Woolley: In the new leasing market, you know, do you expect you might have to get a little creative just on how you structure new leases right now, given that we're gonna sort of be in this ramp-up mode? Or do you think the demand's vibrant enough to continue to sort of sign standard-ish looking leases?

The new leasing market.

Do you expect your you might have to get a little creative just on how you structure new leases right now given that we're going to sort of be in its ramp up mode or do you think the demand vibrant ups to continue to sort of spine standard as she looking leases.

Edward Sonshine: Before I turn it over to Jonathan, who will give you the main answer, I would point out that RioCan, over the last two years, over the course of 2018 and 2019, essentially, we sold off 10 million sq ft of space. I think it's important for everybody to remember that space that was virtually all in what I'll call the secondary markets. I really believe that our urban centered, major market centered, great suburban and centered portfolio, it's just one where tenants wanna be for the simple reason they can do a lot of business. I'll turn over the structuring question back to Jonathan.

Ed Sonshine: Before I turn it over to Jonathan, who will give you the main answer, I would point out that RioCan, over the last two years, over the course of 2018 and 2019, essentially, we sold off 10 million sq ft of space. I think it's important for everybody to remember that space that was virtually all in what I'll call the secondary markets. I really believe that our urban centered, major market centered, great suburban and centered portfolio, it's just one where tenants wanna be for the simple reason they can do a lot of business. I'll turn over the structuring question back to Jonathan.

Before I turn it over to Johnson, who will give you. The main answer I would point out that re can.

Over the last two years over the course of 18 and 19, essentially we sold off 10 million square feet of space I think it's important for everybody to remember that and that space that was virtually all and what I'll call the secondary markets.

And I really believe that our urban center, a major markets centered great suburban and centered Ah portfolio or it's just one more tend to want to beat for the simple reason I can do a lot of Christmas, but all I'll get I'll turn over the structured question back John Yeah, I think.

Jonathan Gitlin: Yeah. I think that hits the main principle, which is that given the strength of our portfolio and its, you know, increased dominance in these major markets, we should be able to dictate more of a normal type of lease. But that being said, of course, we are always willing to consider different kinds of structure depending on the tenancy. I think, again, for a lot of the national tenants, there will be no need to consider any type of novel structure. But I think for some of the smaller entrants that we want, quite frankly, in our urban environments, there will of course be a willingness and a need to structure something that might be a little more based on their success. And again, that's just at the start of their tenure.

Got it hit the made principal which is that given the strength of our portfolio when if.

Increased dominant commute major markets, we will we should be able to became more of a normal type of lease but that being said of course, we're always willing to consider I'd different kinds of structure, depending on the tendency I think again for a lot of the national tenants there will be no need to consider any type of of novel structure, but I think for some of.

The smaller entrance that we want to quite frankly in our urban environments. A there was well of course of your willingness and the need construct for something that might be a little more based on their success and again, that's just at the start of their of their tenure I think that it will eventually convert into a conventional we structure, but I think that was something that we were.

Jonathan Gitlin: I think that it will, you know, eventually convert into a conventional lease structure. I think that was something that we were considering, quite honestly, before COVID-19. Again, I think we have a willingness to consider different types of lease structures, but I don't think it'll be a pure necessity, because of COVID-19. It's not gonna change lease structures dramatically.

Consider and quite honestly before Cobas 19, so again I think we have a willingness to consider different types of restructuring, but I don't think it'll be a pure necessity because of cobot among team its not going to change lease structures dramatically.

Okay and that just lastly can you just comment or in terms of where things stand with Hudson's Bay and the JV.

Tal Woolley: Okay. Just lastly, can you just comment in terms of where things stand with Hudson's Bay and the JV?

I mean at this point Prepas viewed hotel or what do you own a with them.

Jonathan Gitlin: I mean, at this point, it's business as usual, Tal. We own with them a lot of very strong properties. They have, as you know, not been operating in those properties. Insofar as the joint venture is concerned, it is business as usual.

A lot of very strong property. They have as you know not been operating in and those properties, but insofar as the joint ventures concern is it's business as usual and outside of the joint venture interest that we really we own 50% to action based stores one in Georgia Mall I believe one.

Edward Sonshine: Yeah. Outside of the joint venture, I just add, we really own 50% of 2 Hudson's Bay stores, one in Georgian Mall, I believe, one in, is it Oakville?

Ed Sonshine: Yeah. Outside of the joint venture, I just add, we really own 50% of 2 Hudson's Bay stores, one in Georgian Mall, I believe, one in, is it Oakville?

And is it appropriately over a place where Hudson's Bay actually owns the other half.

Jonathan Gitlin: Oakville Place.

Edward Sonshine: Oakville Place, where Hudson's Bay actually owns the other half,

Ed Sonshine: Oakville Place, where Hudson's Bay actually owns the other half,

Jonathan Gitlin: That's right.

Edward Sonshine: in the joint venture. But in our joint venture, we own 13%. Hudson's Bay owns, I believe, 87%. It's largely them. We have one store in Prince George, where essentially they pay no rent. Outside of the joint venture, our exposure to Hudson's Bay, because they started closing their Home Outfitters, I think we have one or two left.

Ed Sonshine: in the joint venture. But in our joint venture, we own 13%. Hudson's Bay owns, I believe, 87%. It's largely them. We have one store in Prince George, where essentially they pay no rent. Outside of the joint venture, our exposure to Hudson's Bay, because they started closing their Home Outfitters, I think we have one or two left.

Annual joint venture, but in our joint venture, we only 13% principal pay downs I believe a 87%. So it's largely them and then we have one store in Prince Georgia.

Where essentially Pedro rents so outside of the joint venture exposure, that's as big a because they set a closing their own figures I think we have.

One or two left that are just a better just diminishing rolling off so our exposure I suspect outside of that joint venture is it's very tiny.

Jonathan Gitlin: That are just, diminishing.

Edward Sonshine: That are just rolling off. Our exposure to Hudson's Bay outside of that joint venture is very tiny.

Ed Sonshine: That are just rolling off. Our exposure to Hudson's Bay outside of that joint venture is very tiny.

Yeah, Okay. Thanks very much.

Tal Woolley: Okay. Thanks very much.

Edward Sonshine: Thank you.

Ed Sonshine: Thank you.

Thank you.

Your next question comes a lot of sand Damiani of TD Securities. Your line is open.

Operator 3: Your next question comes from Sam Damiani of TD Securities. Your line is open.

Operator: Your next question comes from Sam Damiani of TD Securities. Your line is open.

[noise] that were honored thanks.

Edward Sonshine: Sam, we're on. Be quick.

Ed Sonshine: Sam, we're on. Be quick.

Sam Damiani: Thanks. Yeah, I'll be quick. I just wanted to follow up with just on the liquidity side. Like, how much of that CAD 1 billion of liquidity do you envision using for the development program? Do you see the REIT needing a little extra liquidity, just to sort of buy some insurance as we get through the next few months of revenue shortfall, cash revenue shortfall?

Yeah I'll be quick I, just wanted to to follow up with just on the liquidity side like how much of a billion dollars a liquidity do you envision using for the full development program and do you see that repeating a little extra liquidity I was just to be sort of by some assurance as we got through the next few months so far.

Revenue shortfall cash revenue neutral.

Edward Sonshine: I missed the word when you said program. The word,

I I missed the word when you said program where does your.

Ed Sonshine: I missed the word when you said program. The word,

Jonathan Gitlin: Development.

Edward Sonshine: Sorry. You know what? We've played that out. I think Chi is one of the best scenario developers and forecasters. You know, we've done that not only for our board, but we're continuously updating those on literally a week-by-week basis. You know, even though I may or may not have this reputation, but the culture which, you know, I like to think I've contributed to here, is actually one that's always focused on liquidity. I mean, Chi, I think somewhat to her surprise when she took over as CFO a few years ago, when I said to her, I said, "Chi, anytime our availability of liquidity goes under CAD 500 million, I get very nervous." She looked at me like, "What?" But the fact is, I do.

Our development program I'm sorry.

Ed Sonshine: Sorry. You know what? We've played that out. I think Chi is one of the best scenario developers and forecasters. You know, we've done that not only for our board, but we're continuously updating those on literally a week-by-week basis. You know, even though I may or may not have this reputation, but the culture which, you know, I like to think I've contributed to here, is actually one that's always focused on liquidity. I mean, Chi, I think somewhat to her surprise when she took over as CFO a few years ago, when I said to her, I said, "Chi, anytime our availability of liquidity goes under CAD 500 million, I get very nervous." She looked at me like, "What?" But the fact is, I do.

You know what Weve play that out I mean, she is a is one of the best a scenario.

Developers and forecasters and a you know we've done that not only for a board, but we're continuously updating those on literally a week by week basis, and a you know even though I may or may not have this reputation, but the culture, which you know I like to think of contributed to aired.

Is actually one that's almost full.

I mean, she I think somewhat to surprise surprise when she took over as CFO a few years ago I when I said to where I said, she anytime our availability of liquidity goes under $500 million I get very nervous.

Actually looked at me like Wow.

But the fact is I do and I think under.

Edward Sonshine: I think under all the scenarios we've played out from now until year-end, I don't think that line actually gets drawn down to CAD 500 million. Maybe it gets to CAD 500 million. We plan on getting through to the end of the year with everything moving along exactly the way it is today, and hopefully speeding up in the Q4 as we start coming out of this or beginning of 2021, with plenty of liquidity still in hand.

Ed Sonshine: I think under all the scenarios we've played out from now until year-end, I don't think that line actually gets drawn down to CAD 500 million. Maybe it gets to CAD 500 million. We plan on getting through to the end of the year with everything moving along exactly the way it is today, and hopefully speeding up in the Q4 as we start coming out of this or beginning of 2021, with plenty of liquidity still in hand.

All the scenarios, we played out from now until year end I don't think that line actually gets drawn.

Down to $500 million, maybe it gets to 500, so we plan on getting through the end of year with everything.

Moving along exactly the way it is today and hopefully speeding up in <unk>.

Fourth quarter as we start coming out of this work, we had 21 with plenty of liquidity still in that.

Qi Tang: Sam, don't forget we have almost CAD 9.2 billion unencumbered assets, right? Which means we could put mortgage on those, certain assets and then leave the line of credit largely undrawn to maintain very high liquidity.

I think that yeah, we have almost 9.2 billion unencumbered asset right, which means we cook for mortgage all those Ah. So there's an asset and maybe your line of credit largely undrawn to maintain very high including yeah, and they know what Sam I'll, just one last word to add there.

Edward Sonshine: Yeah. You know what, Sam, I'll just one last word to add there, and maybe 'cause I'm old school. Even though it can cost you a little money, 'cause you do pay standby fees on our line, it's like buying. For me, it's like buying insurance.

Ed Sonshine: Yeah. You know what, Sam, I'll just one last word to add there, and maybe 'cause I'm old school. Even though it can cost you a little money, 'cause you do pay standby fees on our line, it's like buying. For me, it's like buying insurance.

Maybe because I'm old school or even though it can cost you a little money because you do pay standby fees on our wine.

Ah, it's like buying for me, it's like buying insurance and <unk> I am and I. Both have believer and you can you almost can't have too much with quick even if a cost you a little money.

Sam Damiani: Right.

Edward Sonshine: I am a believer in you almost can't have too much liquidity, even if it costs you a little money. I think we paid 20-odd basis points standby fee on our line. You know, so what in the scheme when you're in a crisis like this. Equally important, you know, it's something I should touch on. There will be a world after COVID. As the world starts coming out of it's just like in the 2008-09 financial crisis. I'll quote the famous Warren Buffett, who at that time, you know, he was just in his late seventies. Now he's 89, and everybody's still listening to him.

Ed Sonshine: I am a believer in you almost can't have too much liquidity, even if it costs you a little money. I think we paid 20-odd basis points standby fee on our line. You know, so what in the scheme when you're in a crisis like this. Equally important, you know, it's something I should touch on. There will be a world after COVID. As the world starts coming out of it's just like in the 2008-09 financial crisis. I'll quote the famous Warren Buffett, who at that time, you know, he was just in his late seventies. Now he's 89, and everybody's still listening to him.

I think we pay 20 odd basis points standby fees in our line and yeah. So what [laughter] in the scheme when you're in a crisis like there's a and and equally important.

You know something.

I should touch on.

There will be a world after cold and as the world starts coming out of it. It's just like in 2008, nine financial crisis, and a pull them the famous Warren Buffett, who at that time you know he wasn't that he was just minutes late seventies [laughter] now was 89 embodies the listening to it but see yeah.

Edward Sonshine: He, you know, he said, you know, "When the tide goes out, you find out who's swimming naked." You know, in 2008, 2009, the tide went out. You found out who was swimming naked very quickly. We found out most of the United States real estate industry was swimming naked.

Ed Sonshine: He, you know, he said, you know, "When the tide goes out, you find out who's swimming naked." You know, in 2008, 2009, the tide went out. You found out who was swimming naked very quickly. We found out most of the United States real estate industry was swimming naked.

He said that you don't want to tie goes up.

You find out of them swimming naked.

And you know in 2008, nine that type of and I found out of new swimming naked pretty quickly. We found out most of the United States real estate industry with swimming make as Milton eggs and that gave us a huge opportunity.

[Analyst]: Yep.

Sam Damiani: Yep.

Edward Sonshine: As were most of the banks. That gave us a huge opportunity in the United States, which my only regret is we didn't even go bigger. Canadian investors were nervous, so we went big. We still made CAD 1 billion in, like, six years. I don't think we'll have that kind of opportunity again, but there is no doubt in my mind that as we come out of this crisis, whether that's the next two months, three months, or a year, there will be some real estate owners that were swimming naked. We wanna have the liquidity to quite frankly take advantage of any tremendous opportunities that may come up as a result of some people not having that. That's besides insurance, that's the other reason we like to have as much as possible.

Ed Sonshine: As were most of the banks. That gave us a huge opportunity in the United States, which my only regret is we didn't even go bigger. Canadian investors were nervous, so we went big. We still made CAD 1 billion in, like, six years. I don't think we'll have that kind of opportunity again, but there is no doubt in my mind that as we come out of this crisis, whether that's the next two months, three months, or a year, there will be some real estate owners that were swimming naked. We wanna have the liquidity to quite frankly take advantage of any tremendous opportunities that may come up as a result of some people not having that. That's besides insurance, that's the other reason we like to have as much as possible.

In the United States, which my only were credits we didnt, even go bigger, but Canadian investors were nervous so we weren't able to we still need a billion dollars in like six years.

I don't think we'll have that kind of opportunity again.

But there is no doubt in my mind that as we come out of this crisis over there whether that's the next two month three months or years.

There will be some real estate owners that we're swimming naked.

And we want to have liquidity.

Quite frankly take advantage of any tremendous opportunities that make it.

Okay.

Okay. That's Oh I'm sure. That's the other reason, we like that have as much as possible.

[noise] [noise] [noise]. Thank you.

[Analyst]: Thank you.

Sam Damiani: Thank you.

Edward Sonshine: Thanks, Sam. One more?

Ed Sonshine: Thanks, Sam. One more?

Exactly.

Well more than that.

Operator 3: There are no further questions at this time. I would like to turn the call back to Edward Sonshine for his closing remarks.

Operator: There are no further questions at this time. I would like to turn the call back to Edward Sonshine for his closing remarks.

And there are no further questions at this time I would like to turn the call back to Mr. Sunshine My closing remarks.

Edward Sonshine: Okay. Well, thank you for, you know, dialing in what is a bizarre time. You know, it's too bad we couldn't do it on Microsoft Teams. I'd like to see where you're all sitting or Zoom or whatever you call. You know, for this number of people, the technology really isn't that great yet, but it's another one that will get better. I have been amazed, even, you know, speaking as old school guy, at how well the technology has adapted itself to getting everything done remotely, like I mentioned in our results. This call took place on time. All our board meetings took place on time. Our AGM is happening when originally scheduled.

Ed Sonshine: Okay. Well, thank you for, you know, dialing in what is a bizarre time. You know, it's too bad we couldn't do it on Microsoft Teams. I'd like to see where you're all sitting or Zoom or whatever you call. You know, for this number of people, the technology really isn't that great yet, but it's another one that will get better. I have been amazed, even, you know, speaking as old school guy, at how well the technology has adapted itself to getting everything done remotely, like I mentioned in our results. This call took place on time. All our board meetings took place on time. Our AGM is happening when originally scheduled.

Okay well. Thank you for you know dialing in and what is a bizarre time.

You know, it's too bad we couldn't do it on Microsoft teams I'd like to see where you're all sitting or zoom or whatever your call but.

You know for this there's number of people and technology really isn't that great. Yes. It is another one that will get better I have been amazed even you know speaking as old School Guy.

And how well the technology has adapted itself to getting everything that we're hoping I kind of like I mentioned that our results. This call took place on time or board meetings. They took place on time our E. G. M is happening when originally scheduled unfortunately.

Edward Sonshine: Unfortunately, no in-person speeches and that will quite frankly make me very sad, because right now it's scheduled to be my last speech, so I as your CEO. You know, it's on the one hand amazing, but I think like everybody, I miss social interaction. I miss being able to talk to individual shareholders at the end of the meeting and meeting them and talking to them and being able to answer their questions while I'm looking at them. I think we all miss that. That's one of the reasons, quite frankly, I'm confident that the world will bounce back a lot quicker than the pundits will have us believe. Will there be some interim changes, for example, in offices? Yeah.

Ed Sonshine: Unfortunately, no in-person speeches and that will quite frankly make me very sad, because right now it's scheduled to be my last speech, so I as your CEO. You know, it's on the one hand amazing, but I think like everybody, I miss social interaction. I miss being able to talk to individual shareholders at the end of the meeting and meeting them and talking to them and being able to answer their questions while I'm looking at them. I think we all miss that. That's one of the reasons, quite frankly, I'm confident that the world will bounce back a lot quicker than the pundits will have us believe. Will there be some interim changes, for example, in offices? Yeah.

No in person features and that were quite frankly make me very sad.

Because right now is scheduled to be my last speech, so I I hadnt as your CEO So I'm.

It.

You know, it's a one had amazing, but I think like everybody I, Miss social interaction I missed being able to talk to individual shareholders at the end of the meeting in media and talking to them and.

Being able to answer your questions well I'm looking now so I think we all wish that and Ah. That's one of the reasons quite frankly, I'm confident that the world will bounce back a lot quicker than the pundits are well absolutely.

Will there be some interim changes for example in offices, Yeah, I open space offices will probably only be able to use half were space.

Edward Sonshine: Open space offices will probably only be able to use half their space for a time period. Once we have this under control, I am sure we will quickly be able to go back to the efficient and quite frankly, probably more productive manner of doing business that we all have. I thank you for calling in on, like I say, wherever you are. We'll talk to you in a few months, if not sooner. Bye-bye.

Ed Sonshine: Open space offices will probably only be able to use half their space for a time period. Once we have this under control, I am sure we will quickly be able to go back to the efficient and quite frankly, probably more productive manner of doing business that we all have. I thank you for calling in on, like I say, wherever you are. We'll talk to you in a few months, if not sooner. Bye-bye.

First time period once we have this under control I am sure we will quickly be able to go back to them.

The efficient and quite frankly, probably more productive a matter of doing business that we all have so I. Thank you for calling in on like I say wherever you are and we'll talk to you in a few months if not sooner I like.

And this concludes today's conference you may now disconnect.

Operator 3: This concludes today's conference call. You may now disconnect.

Operator: This concludes today's conference call. You may now disconnect.

Edward Sonshine: Any comments?

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