Q1 2020 Earnings Call

[music].

Good morning, and welcome to your chemicals first quarter 2020 minutes carpets call. All participants will be a lot. Some only luck should you need assistance, placing all close that specialist Pepsico Starkey followed by chair.

After todays presentation, there won't be an opportunity to ask questions asked a question you May Press Star then one and their touchtone phone.

Withdraw your question. Please press Star then too.

Please note. This event is being recorded I would now like to turn the conference over to David puts Nicky Senior Vice President Investor Relations and strategy. Please go ahead.

Good morning, and thank you for joining Kimcos first quarter 2020 earnings call from wherever you find yourself falling social dispensing guidelines.

Obviously hosting this call remotely from our home as a new dynamic and we hope to make the best of it even with the occasional dog Barking and kids yelling into background.

It Kimco management team participating on the call today include Conor Flynn Kimco, CEO, Ross Cooper, President and Chief Investment Officer, Glenn Cohen, Our CFO, Dave Jameson, Kimcos, Chief operating officer as well as other members of our executive team that are available to answer questions. During this call.

As a reminder, statements made during the course of this call may be deemed forward looking is important to note that the companys actual results could differ materially from those projected in such forward looking statements due to a variety of risks uncertainties and other factors.

Please refer the company that SEC filings I addressed such factors.

During this presentation management may make reference to certain non-GAAP financial measures that we believe help investors better understand kimcos operating results.

Reconciliations of these non-GAAP financial measures can be found in the Investor relations area of our website.

And with that I'll turn the call over to Connor.

Good morning, and thanks for joining us.

Today, we will take a bit of a modified approach to our quarterly call I'll give you an overview of how we have prompted the challenges posed by covert 19, and how we plan to move forward as the country begin to reemerge.

I will follow with a recap of the numbers for Q1, and our desirable liquidity position.

First on behalf of the entire kimco team I want to thank all the first responders medical professionals volunteers grocery store workers and essential retailers that have risk their own personal safety to serve and help all of up they are the true heroes and their effort should not be forgot and on a personal note I also want to thank all of you for here so.

Port and my personal about with the virus your email text and talk for a powerful as any vaccination and we're a big part of my recovery.

I would also like to recognize the entire can go team for their tireless efforts to ensure our centers continue to provide essential goods and services to our local community.

All of our centers are open and operating and we will continue to provide our shoppers are vendors our employees and our extended kimco family with a safe experience, our best health and safety practices have been shared with companies both small and large so that we can help those less resources and more critical need.

As an organization, we are battle tested having successfully weathered both industry specific cycle and macroeconomic downturn.

That said this current situation is unprecedented and poses new challenges.

We've been working seamlessly and remotely since mid March focusing all our efforts as Milton reminds us to survive, but we can drive.

Our strategy is focused on exactly that managing through the current environment with an item positioning ourselves to thrive when the economy opens back up.

Our strategy for dealing with covert 19 was one we implemented quickly to try and help those most in need.

Time was of the essence on all fronts.

And a wait and see approach was never considered.

First we prioritize liquidity.

Glenn will give the details or how we bolstered our balance sheet, which included securing a well time term loan very advantageous rate with extension rights.

With a well heeled balance sheet and cash position kimco will not only survive, but it had a strong position to prosper.

Moreover, we wanted to have available resources not only for our own you put to help our retailers many of whom don't have the same access to capital.

Next we refocused our operation by shifting more resources to the frontline.

Our team has worked tirelessly to develop new approaches and launch new programs that address the numerous tenant request.

Our significant invested cloud hosted technologies from companies like Salesforce MRI, Microsoft and Zoo has streamlined our operations and created efficiencies across the organization.

These investments have allowed us to roll out programs of size and scale rapidly across the country.

In addition, we deployed custom developed tools to help us manage and quickly address tenant communications related to cobot 19 concerns.

That allows us to react quickly and be proactive.

We have led by example, as a number of our peers are following our leading technology website architecture and tenant assistant programs.

Our tenant assistance program or tap it a multi pronged approach to give our candidates the valuable resources in a time of meat free of charge at the end of March we encouraged our small shop mom and pops to embrace tap, which provides them with a free legal advisor to navigate the numerous state and federal programs available for small businesses.

To help them whether this storm.

He also engaged quickly to get the small businesses the opportunity to know that the rest for April was not paying over their head. So they can focus on the government assistance programs and try and keep as many employees as possible. In addition to legal advisor. We have helped identify lenders to work with our small shop tenants applying for the PPP loans by our last count.

Just under 600 tenants have participated in the program.

For the month of April we've collected cash rent totaling 60% of our bill growth, we feel that rent approach requests for 35% scheduled rent from tenants and it worked out deferral plans that equal approximately 14% of the April.

For the month of May we are still in that Grace period for a number of leases that allow our retailers to pay over the first few weeks as a month to date may rent collections were tracking year. The same level at April through the first week of them up.

Each of our deferral programs is confidential and catered directly to the needs of the tenant we are in a very fluid environment and we plan to proactively address the challenges ahead by quickly implementing any required changes while keeping an eye on the long term as such we don't want to speculate and instead focus on the facts and provide accurate info.

Permeation as the situation continues to unfold.

We are working to maintain occupancy and bridge our tenants to the other side of the pandemic. We're also on the alert for dislocation opportunities, we've not seen any asset quality trade in this environment, yet, but we are ready if and when they present themselves.

At the same time until we get a clear picture of the landscape. We have hit the pause button on assets, we are considering adding to the portfolio before the cobot 19 crisis hit.

Our development and redevelopment pipeline remains largely on track and we're in the fortuitous position of having limited projects in the active safety.

Our two main project Dania, Florida and highlight in Staten Island are very close to completion and will be tremendous assets for kimco long term.

After a temporary delay we received approval is to continue construction at the Boulevard at the former Highland shopping center as it was determined to be essential due to the shoprite grocery anchor.

We are hopeful that this signature series asset will open later this year at Dania Pointe construction has been ongoing with urban outfitters in EPS apology, beginning to build out their newly leased basis.

We recognize that the pandemic may pose challenges surrounding the schedule of inspections and achieving achieving final Sino we remain optimistic that we will complete these two projects on schedule.

As previously noted we have postponed nearly 100 million of capital expenditure as originally planned for this year as a way to further our already strong liquidity position.

Our strategy of focusing on grocery anchored centers and mixed use assets continues to validate our approach. These assets are outperforming, especially in this current environment.

Our first two class a multifamily projects Lincoln square in the heart of Philadelphia, and the Witmer in Washington, DC are both operational and despite the recent shelter in place orders, we've been able to continue leasing activity at both with virtual tours.

Based on the success of both for Lincoln Square and the Witmer, we're continuing to expand upon our existing 4500 multifamily units that are currently entitled and our new goal over the next five year is to have over 10000 units and title.

Perhaps never before has the local grocery pharmacy and essential physical brick and mortar retail been more important.

And while I anticipate in Congress will continue to accelerate in the stay at home period of the pandemic. It is important to note that the lions share of E. Commerce deliveries are originating at the store base.

We anticipate curbside pickup combined with click and collect to be another trend that will accelerate both during the current pandemic and on the other side.

We have launched the curb kimco curbside pickup program and we're already working with our tenants implement proprietary system to provide for curbside pickup at our parking lot.

We want to help our retailers embrace the new normal of retail and help them ramp backup sales upon reopening with a full suite of services that are now expected by our shoppers.

We know the road ahead is not going to be easy, but with persistence and a laser focused on what we can control, we will be position to thrive overtime Glenn.

Thanks, Conor and good morning.

Clearly we are all experiencing an unprecedented health crisis that is causing a global financial recession.

Well, what some may view as a global depression.

Just some time is times like these that bring out the best and all of us.

So kind of sentiments in that we salute little the workers on the front lines, where caring for the sick and ensuring that we have the most vital essentials, such as groceries medicine, and medical office and pet supplies and I cannot be proud of how the entire kimco organization handling this crisis.

We are fortunate to have significantly invested in our technology infrastructure, which has enabled us to quickly convert from a multi office setting to a work at home environment for 500 associates within 24 hours would it what is truly amazing is we've never skipped a beat as a matter of fact communication improve.

Productivity across the entire organization is at the highest level.

We physician the company to withstand the severity of the current situation and come out stronger on the other side, which I will elaborate on shortly.

2020 was off to a solid start as the first quarter results will demonstrate.

Let me provide some color on the first quarter and spend some time on our balance sheet strength and significant liquidity position.

As a reminder, beginning in 2020, we are reporting only on Navy defined FFO.

If we recognize a unique transactional gain or charge will definitely be should have pointed out.

Maybe to FFO came in at a 160.5 million or 37 cents per diluted share for the first quarter 2020.

This compares to 158.4 million was 38 cents per diluted share for the first quarter of 2019.

Our first quarter results include the decrease in Hawaii, seven and a half million. This decrease was driven by net disposition activity during 2019, lowering in Hawaii by 11.4 million and higher credit loss of 2.8 million.

Due in part from the bankruptcy filings with tier one modalities and fairway.

And why benefited from 3.1 million of incremental development in Hawaii from our Lincoln Square Dania Pointe Mill station and Grand Parkway project inorganic rental growth of $6.1 million.

FFO for the first quarter 2020 also benefited from lower DNA expense of 4.8 million and reduced financing costs of $5.8 million with the latter resulting from the redemption of 575 million a perpetual preferred stock last year.

We issued a 350 million, 3.7% 30 year bond and 9.5 million shares of common stock at 21003 cents per share the funds the preferred redemptions during 2019.

A successful transmitter transformation of our operating portfolio has put us in a strong position to weather the covis 19 impact, but we realized the remain cap the remain challenges ahead.

Pro rata occupancy stands at 96% down 40 basis points from year ago, but flat to 331 19 results anchor occupancy is that an impressive 98.6% down 30 basis points from year end, but up 80 basis points from a year ago.

Small shop occupancy is at 88.8% down 50 basis points from the year from year end.

Primarily due to the vacates from dress barn and tier one.

Pro rata leasing spreads remained strong during the quarter at 7.3% comprised of new leasing spreads of positive, 13.3% and renewals and options of positive 6.8%.

Same site NOI growth was positive 1.5% for the first quarter 2020 versus a comp of 3.7% in the same quarter last year.

Primarily driven by minimum rent increases, which contributed 230 basis points and increased percentage rent, which added 30 basis points. Offsetting these increases in same site NOI is higher credit loss from the bankruptcies previously mentioned all in oil a solid first quarter.

Now, let's spend some time in our balance sheet and sizable liquidity position. During the first four months of 2020, we have significantly fortified our liquidity position with the execution of four key transactions.

In January we completed the 225 million Fanapt refinancing for our key or joint venture comprised of a $75 million five year unsecured term loan used to tell you up maturing mortgage debt and the new 150 million four year, plus one year option unsecured revolving credit.

Facility with zero drawn on it.

Pricing for the term loan is at LIBOR plus 135.

With the revolver pricing at LIBOR, plus 120 basis points.

February we completed the new $2 billion revolving credit facility priced at LIBOR, plus 77, and a half basis points due in 2025, including options and replaced our previous $2.25 billion revolver, which was scheduled to mature in March of 21.

We ended the first quarter with $675 million run, including 300 million drawn in mid March as a precautionary measure as the coated 19 crisis was unfolding earlier. This month. We subsequently we paid to 300 million.

In April we closed on a new 75 million dollar mortgage on a joint venture property, replacing a $66 million secured loan that was the largest individuals' joint venture debt that was scheduled to mature in 2020.

The new Sevena alone has a fixed rate coupon of 3.13%.

And then lastly in April we completed a new 590 million dollar term loan priced at LIBOR, plus 140 basis points with 15 banks participating.

This loan has a final maturity date in April of 2022.

As of today, we have nearly 600 million of cash on the balance sheet 1.6 billion of availability on our revolving credit facility and over 320 unencumbered assets, which represents approximately 80% of our total and ally.

Combined we have the most liquidity by far as any read in the opening our sector and it puts us in excellent shape to withstand the crisis assist our tenants who need the most health and provide maximum flexibility to be opportunistic suitable transactions arise.

Our weighted average debt maturity profile is 10.1 years, one of the longest in the entire read industry and we only have 114 million of pro rata debt.

Maturing for the remainder of 2020.

In addition, we have significant cushion with respect to our bank and bond covenants and are confident that we could access the unsecured bond market. If we deemed is desirable.

As previously announced.

As a result of the uncertainty and lack of visibility regarding the extent of the code with 19 impact we have withdrawn guidance for 2020.

In addition out of abundance of caution.

What has decided to temporarily suspend the common dividend.

The board will monitor our performance in economic outlook on a monthly basis and intends at a later date to reinstate the common dividend during 2022 and amount at least equal to our re taxable income.

Certainly there are many unknowns, including the timing of the country reopening the pace of getting back to some semblance of a new normal in the financial health of specific companies.

But we remain confident that with our abundant liquidity position long debt maturity profile superior portfolio, an incredible team, we will as Milton says not only survive but thrive.

And with that we'd be happy to take your questions.

Before we start securing I just want to offer a reminder, that you may ask your question with an additional follow up if you have further questions. Your mother welcome to rejoin the queue.

Greg you may take the first call in the QNX.

We will now begin the question answer session to ask your questions Americas Star then one under Touchtone phone, if you're using a speakerphone. Please pick up your handset before pressing the kids. So what's driving your question. Please press Star then too.

Tom will pause momentarily to assemble our roster.

Our first question will come from Christine Mcelroy with Citigroup. Please go ahead.

Hi, good morning, and thank you.

So I guess this is for you we see in April collection rates from you and all of your peers. The variance among the group is not that wide, but it's there how should the investment community be looking at April collections in the context as what's most important thing is like has ultimately that you know the entire collectability.

So you know some national tenants are playing hardball, but should ultimately be acquisition to pay while local and maybe regionals are getting a little bit more support from the government and landmarks what are sort of the most important factors we should be considering ultimately.

Yes, Hi, Christy its a good question I think it's so early on in the pandemic that the first month of collections that everybody is tracking should be taken with the grain of salt I think because the real the real question Mark those how how long this will last and how deep it will go and so we're still sort of in the early innings of it and Europe your.

A spot on in terms of the Lions share of what we did early on was to help our small shop tenants because we felt we've been pretty pretty clear from the gecko that we think our large national retailers, who have the balance sheets and the cash on hand positions of pay their rent should pay their rent. So we can use our balance sheet to go in house, the small shops, the ones that don't have the balance sheet.

Or the cash positions to weather the storm and so the first month that you're seeing being reported I would say that the lions share of of the numbers that are reported probably capture something similar where the bigger players are paying a portion or all of their Reds and then the smaller mom and Pops are probably working.

Through this to try and make sure that they survive and get to the other side of it. So as it progresses I think obviously may will be important in June and the Reopenings will be critical right. So you've started to see now if you state start to reopen.

Anecdotally, we've heard a few of our retailers from store managers say that so far so good they've been pleasantly surprised so we continue to monitor the situation, but again, taking where the grain of salt that it is extremely early.

Okay, and then about half of your projected capex reduction, making leasing capex how much of this is a function of Jeff you expect lower leasing volume and therefore environment versus a concerted effort to pull back on leasing and frankly, even in that context, how much is the current environment, where many tenants are not respecting that.

Long term lease contract how does that change your view on the economics are no risk associated with some of these upfront leasing costs and how much are willing China.

Hey, Christy as Dave said on it.

But of a layered question. So let me just trying to break it down a little bit to make sure I address everything that you did ask as it relates to the leasing Capex right now a lot of that is deferred capex that not necessarily we won't be doing but we'll probably be pushed into 21.

We are anticipating that there'll be some delays in terms of RCD commencements and or the leasing volume itself may be accelerated in the back half of this year as we start to get better visibility into.

The situation with with with Kobe to and the reopening a markets and.

Then targeting those retailers that are actively looking to expand because there are number them better looking at this as a real opportunity to continue to strengthen their own brick and mortar portfolios. So that's where we'll typically see it as it relates to source Sina deals and how we evaluate new deals going forward, we've always taken a very hard.

Look at at the quality of the tenant and their balance sheet and that will continue throughout this it's always been a historic focus.

And it will remain a focus because it's really at these times is where that matters most.

And those with the strong balance sheet and great operating fundamentals will be the ones that continue to did thrive.

During this time and then on the back end of it as well.

Thank you.

Our next question will come from Greg Mcginnis Flip Scotia. Please go ahead.

Hey, good morning.

Glenn can cause done a really good job in making sure that has loop liquidity survive. This is not necessarily unique position for can cooperating difficult environment, but how are you thinking about managing leverage throughout the shutdown once we get on to the other side of this pandemic and loss the wouldn't mind commenting on.

The transaction environment your ability to help fund in the expenses with dispositions that they appreciate as well thanks.

Hi, Greg.

Look leverage is always continue to be a focus for us.

With some of that liquidity. So we really haven't moved <unk> really hasn't moved and you see that both in the numbers at the end of the first quarter and where I would expect it to be even at the end of the second quarter against leverage is important thing we will keep a very close eye on it.

You know, we're we are a strong triple be pleasant be double a. one.

Rated company, which is important to us we we still have desires to get us to a positive outlook.

And I think we're doing really all the right things around that where the rating edges, you'll see a difference I mean, there you know tapping the bank market and having 15 banks participate in this environment is fairly unique I do feel as I mentioned to my prepared remarks that we have clear access to the.

Bond market, if we wanted to do it.

So and you know again, we we feel like we're in pretty good shape on that standpoint, and leverage will continue to be a focus of trying to reduce it further.

Yeah as it relates to the second part of the question I would just say that the the current market is really taking a a bit of a wait and see approach to really better determine the longer term impacts to cash flow to tendency. We have seen a few smaller deals trying to structure around the situation with you know master leases escrows.

Hold backs, but it's it's really a a pretty diminimus component of the overall transaction market in terms of our own portfolio and utilizing dispositions I mean, we we are extremely confident in the portfolio transformation that we've undertaken over the last you know five to seven years as you know our our intent coming into this year <unk>.

Was to have a very modest level of dispositions and really that hasn't changed even in the midst of this you'll see a a very light second and third quarter from a a disposition and transaction overall standpoint for kimco as we get into the fourth quarter and we may evaluate a couple of deals if the market you know d. for us to a certain.

Extent, but we do not anticipate utilizing dispositions as a major funding mechanism in any meaningful line.

Great banks and encounter you should have clear focus on helping out the smaller shop tenets and I'm just curious how successful your tenants and obtaining the the P.P.P. funds with guidance from the <unk> assisting program give any stats on maybe how many tenants.

According to seem funds.

Yeah. It's it's it's obviously something we we focus on and I'll tell you that the first round was uninspiring because you know typically as you've seen some of those that's come out it's sort of reflected exactly what we saw in our small shops and it's that around 5% of them early successful in the first round, but the good news is we've seen.

Quite a few be very successful in in the round following it and we think that since they've made tweaks to the program and it's been more focused on the small shop and the small restaurant and the mom and pop we think that they have the tools now to get through the window and be successful obtaining those funds. So we're cautiously optimistic.

Pick that obviously they did it extremely fast and had to get it out there and and there were some some some loopholes in there that people took advantage of but now we think that the small shops that we have have the right tools in place and are ready to go we get the the P.P.P. Lo and so that they can make it to the other side of this so we're cautiously optimistic that they've made the changes.

<unk>.

And thanks for the color <unk>.

Oh next question will come from Alexandria Goldberg, What's Piper Sandler. Please go ahead.

Hey morning, and thank you first just on the dividend you guys suspended that the common dividend, but it sounds like you're still going to pay the preferred so based on where you've paid the comments, so far and presumably going to pay prefers the rest of the year you guys need to pay a common dividends to balance the you're satisfied.

Compliance with read status.

Oh, Hi, Alice says Glenn based on where we are currently and based on our own internal forecast. The answers, yes, we we still need to pay a further dividend to cover taxable income.

Can you share how much is are you close to the line or you're still pretty still on the T. box and you still got yeah, we share that Alex I I would say, it's it's honestly out it's just again, it's it's too early.

Yeah, there's a lot of there's a lot of moving parts that go into it.

But we we as I as I mentioned, we we we would still need based on the current forecast it would be a need for further dividend.

To make our <unk>, the <unk> distributions equal 100% of our taxable income.

Okay, Great and then the second question is you know just in in speaking to you know read you know other remotes out there sounds like tenants have credit as part of their bank lending. They have to be you know current on all of their leases et cetera, but something to tenants have been seeking waivers from their creditors. So.

That if they don't pay their leases, they're not in the fault of their credit do you know how many of your tenants have sought those waivers out from your from their banks.

Oh I can't Dave We we don't haven't really had that discussion with with the retailers may I haven't brought up to my attention.

Okay. Thank you.

Oh next question will come from Rush Hell with Morgan Stanley. Please.

Hey, good morning, and Conner I'm glad I'm glad to hear your feeling better one to come back to to start off coming back to a question Christie asked about maybe ability to differ expenses.

Thinking back to you know how much cat backs you <unk> you you were able to reduce during the G.S.C., but maybe Connor <unk>, if you're thinking about fully loaded cap x., both re occurring in and then development and redevelopment <unk>. How much do you think you could reduce that from a you run rate in 2019.

Thanks for that it's it's it's nice to be back in the saddle. That's for sure <unk>. We we look at our cat backs in our Outback really on a side by side basis than we have multi year cutbacks and off that's plans and so what we do is we go through that in detail to figure out what is required to be.

Sure that the just the the operating plan keeps the shopping center as safe as possible, making sure that the required upgrades are are done and that they the more the the the the needs and wants to I guess are separated so we we we obviously prioritize the needs and then we push out the ones.

It's just on the capital plan for each and every asset on the on the offensive cap actually we're looking at are developing redevelopment plan. You know we continue to think that are asset base is ripe for redevelopment.

<unk> My comments, we think we're really only in the early innings it'd be entitlement plans that we've played these these last few years, we've been successful with with the gaining traction on the multi family entitlement Bland, we think that were again, probably going to double the amount of entitlements and the next few years.

Mainly because of we see the the path ahead now the question is how much of that can we activate and how much would you put that you have to pipeline in this environment, we're probably going to hit the pause button on taking on projects ourselves, but we may look at ground. These thing or doing some other projects that way that limit the amount of capital that we would have.

To implement to the project.

But look at the value creation over the long term and again, it's all about the long term here, we know that we're in an unprecedented situation, but typically what we've seen in the past at least when I was out west when we went through the last crisis. We were very very successful on the entitlement plans during the downturn many.

Times cities and states are in desperate need of raising taxes in capital and they loosen up their grip a little bit on the entitlement plan. So we might be a actually even more successful on our entitlements in a situation like this then we even expected so the key for US is securing the entitlement and then as we've talked about before.

If that decision tree, where our costs the capital is and do we elect to sell the entitling rights do we left to ground. They see entitlement rights do we elected joint venture the entitlement rights or do we elect to self developed but I think in this current situation. The likelihood of doing self development is very slim, but we do think that long term bike racing on entitlements is critical to.

Success and critical to our shareholders.

God I I think that's that's a pretty pretty helpful color.

I wanted to talk about in negotiations with with tenants maybe not just what you're hearing currently but I think what a lot of what I'm certainly trying to understand what I think a lot of us are trying to understand is you know there's the structural dynamic change over the medium to long term.

So I'm curious you know are you hearing about you know any tenants wanting to stay in your properties, but but maybe go to more of a percentage rent structure or any tenants asking for you know lower rents I I would think that there was you know a fair amount of tenants that that still are very viable and want to be involved [laughter], but but or maybe you know <unk> needing a little bit.

More cushion and they did previously so I'm curious you know are are you are you engaging in any of those discussions yet or is it still too early days.

Yeah. This is Dave it's great question. It is very much still the early days I mean, when there's by it it feeling like almost a decade that we've been through this it's really only been about six weeks. So so keeping that in contact you know the way we've approached it is really wanting to take a very methodical and measured approach one month at a time huh.

There was discussion and as needed as they arise and then we continue to get more visibility you know true the course of Ah. This summer and then ended the fall to better understand exactly what the outcome in the long term applications will be from the retailer side you know they a lot of our retail or again as I mentioned earlier see this.

Long term as an opportunity to continue to strengthen their portfolio and we'll we'll we'll be wanting to expand and they are starting to reopen their location to add as market started to open as well [noise]. So you know for us it's going to be a very measured approach and as we get further along a lot better visibility into.

Longer term about.

Okay, what experiences to add to that I think it's important to know and retailers are prioritizing. This is they look at their their their <unk> their opportunities that and they see their boxes and the differentiator for Tim go is that we have third party validate that our market rents are acre boxes or 55% below market and.

So when they look at their fleet of stores, they recognize which stores they need to protect because they're not going to be able to replace that type of economic deal and so I think one thing you're probably going to see there's going to be a limited amount of landlord through there as well as on the other side of this that have the capital to invest in some.

The the larger and the junior box type with deals that are out there. So I would anticipate that you're going to see those those anchor tenants. Those junior anchors that are that are successful.

Prioritize the spaces that they have that are either on ground nieces are significantly below market rats, and we think that to differentiate African <unk>.

Yeah that very very helpful guys. Thanks again.

[noise]. Our next question will come some <unk> well. Thanks America. Please go ahead.

Well thank you.

Oh I'm the different rental agreements when are you generally targeting for for the pay back of the differed rent and are you getting any other control rights as you enter into these different agreements.

Yeah. This is David cracked.

It really is a case by case analysis, we we treat each each retailer on its own and those discussions and so you know they will vary based on a needs and wants on both sides and I got we've wanted to take a very measured approach here just addressing at one months at a time.

Okay.

<unk>, we have seen opportunities Craig to recapture control areas and things like that that would open up some redevelopment entitlement opportunities, but as dates as it really in every every individual tenant every site every leases a little bit different. So you have to go you know one by one.

Okay, Great and then just.

To the <unk> curbside pickup program.

Under a how you're monitoring it and does the national role I've seen to the eminent.

Yeah. Yeah. So this is so we we first launched it in in Texas now in Texas, Who's going to be one of the purse marks the open to require curbside. So Graham Parkways actually fully deployed at this point with with stalls in play and add those retailers have started to open the we've seen both local and national utilize it.

We anticipated curbside to be a trend into the future at some point it it's been ongoing dialogue for years now at various events in in our conversations with our retail partners <unk> that did was really just accelerate this this trend that was imminent and so for us were able to get out.

In front of it very very quickly because we were already working on plans to deploy.

And our system being centralize were able to offer those retailers specific zones in which they can utilize for their curbside pickup pick up and then they communicate directly with their 10 that are there shoppers I wasn't going to go to and then though shoppers call. The the retailer to identify exactly what stall there.

And so you know that's far it's early right, where about a week or two into our initial deployment at Texas, but the response right now it's been very favorable and as it relates to the balance of the National program. We've been already in process with that and we'll have again, a a very measured approach on that roll out, but yeah. The way the trend is go.

Pointed that curbside will just be one of those other tools that retailers and landler's will be working collectively to ensure that we service the customer and about the best way pot.

[laughter], Craig Craig I think it's a way to get customers more comfortable coming back to the shopping center as well. So you know one of the the key challenges that we focused on is is helping our small shop tenants as well as getting the customer.

Level of comfort so they can go back to their daily needs and services when the when the states are allowed to open backup and we feel that because most of our grocery stores are big Bucks tenants in our home improvement centres have been opened through this that the customer is is actually comfortable with that.

Graham that they have been very successful or retailers I reported a 200 per cent plus growth and curbside pickup. So we figured why not take the best practices of our largest national pennants and share that with our small shop and so that they can hopefully rebound quickly and that we also invite the customer back to the shopping center in a way that gives them the.

Comfort level that I think it's gonna be required to make sure that we rebound as quickly as possible.

Yeah. It does turn like a good way to facilitate the the towards the reopening. Thank you for your comments.

Oh next question will come from Smeared panel was Evercore I.S. high. Please go ahead.

Yeah.

Morning, guys. So <unk> I guess the question I had was on Cotenancy risks I mean, how should we think about that.

I guess in a portfolio, especially as it relates to some of the bigger you know the box you're centers are there.

Or the newer developments that you had I assume they're leases that are tied to some of these and honest centrals right.

The gyms the theaters I mean, if they were potentially restructure or even closed doors.

I mean, how how does that trickled through it I guess, the the rents of or the other kind of so.

Yeah, Cotenancy risk for us as pretty minimal when you think about the way that Cotenancy has been drafted in a lot of these beliefs as it does very case by case, but <unk> predominantly across our our portfolio. A cotenancy clause has a number of tenants having to go dark in order for it to be trigger and so if you think about that too.

<unk> shopping center has maybe three to five anchors typically a cotenancy clause in our portfolio needs at least two to three of those anchors to beat dark in order for it to be trigger and we do come into this you know from a position of string you think about the multi year repositioning that we've gone through if you think about the balance sheet and how it position.

Go along and if you think about our occupancy from an anchor perspective. It over 98% you know we in a lot of ways. We for been preparing for this now we we we do the Psycho was going to end, we never would've guessed. It was going to end this way, but in a lot of ways. We've been preparing for this and a lot of the Perl program that we've been talking to tenants as well.

Allowing us to sort of watered down those cotenancy clauses or give us even a little bit more strength on the other side of it so put that helps.

No. Thanks for that and I guess my second one is on grocers right. I mean can you provide in an update on on maybe even albertson's here.

What's the potential to even monetize that.

That investment at this point I mean, clearly the grocery sector has been pretty solid here during the pandemic and then you know albertson's is certainly reduced or their deposition years. So how should we think about that.

Good morning, three Edwards How're, you you and your family's sake unhealthy.

For for Albertson's I I think you might have seen on Tuesday night, they refiled and updated the rest one based on the fiscal year round for them, which was in February and they really have performed extremely well there there Commodore sales are up in March like 47%.

I think over the first two months over 30% and they thought they'd done a great job as you mentioned on the balance sheet in improving their fit that profile. So they feel very they feel great position you know on potentially on an I.P.O., but you know markets are the market. So we have to work with the underwriter see with the right thing is to do.

On that front.

And and execute at the right time, but they're really focused right now on running the business and it's much more complicated today for them and it was two months ago. So you know we want it as as the owners make sure they <unk> correctly, and and and make the company as strong as can be.

Thanks, guys appreciate the color.

[noise] Oh next question won't come from like lower with J.P. Morgan. Please go ahead.

Yeah, I, new the game plans for <unk>, but how are you can keep up the risk that you know with so many people out of work that this could turn into cuts and from the closures. Its its sales are slow to come back.

Yeah hide it a escape again, so I I again it. It's it's so early in this cycle to to really make any real forecasts on what the the longer term outcome will be so you know fries with that affirmative program. We've been wanting to take at one month at a time game better visibility ended the program and.

Too you know how cool, but it's going to have these impacts on the retailers unemployment et cetera longer term.

And then in which case, we'll be able to to address that but you know if our focus there's always been on other attendant retention added the gate. It's coded started and were exhausting all of our resources to ensure that they have the appropriate support to survive and thrive through this long term.

God It or you are you operating with a view, though that this is worse than the T.F.C.D. or better or 'cause similar.

It it's it's it's unprecedented in a lot of ways in it and it's an it's a very different outcome. You know this Wednesday, yeah, I I think the the great recession, where the financial crisis. You know this was a social crisis initially and and now we're starting to see how we're to Bob's and how it plays but it's still it's still.

Early days, so I'd hate to forecast exactly what what the expectation would be longer term here until we start to see a little bit more.

The future.

Hey, Hey is collapsible for a little more you know to his point again. This is a health crisis that it's turning into a financial crisis. A lot of these companies you know like the really the strong retailers that many than that are closed today, they're not closed because their business was dead or they had been inventory yeah <unk>.

It was because of the the pandemic that women. So it's very difficult to compare it to the great financial crisis, I mean look look at unemployment unemployment at 14.7%.

Yeah, you have 30 million people that are out of work temporarily on furlough, but but different then the different than the Christ the great financial crisis. The government has been in credibly positive about pumping liquidity, helping the consumer and giving them 600 dollar checks on top of the unemployment. So we just.

Again, and the end, though it's too early to really tell where we're going to come out. So we just taking a day at a time a week at a time in a month at a time.

<unk> Okay. Thank you.

Mm.

Our next question will come from Derek Johnson with tore expect please go ahead.

[noise] Hi, good morning, everybody I I wanted to go back to the tennis assistant program real quickly how can have become more substance versus P.R. and and I say that respectfully right. So how long you invested in tweaking the approach to filing for the programs for the more tenant actually senior.

We've been round too and or is it up by an issue with local pen and so so bottom line. What can you do to generate a higher success rate going forward.

Mm.

Yeah, I love to Dave.

But sorry, and and so yeah to with the with the program to start the you know we add as counter mentioned in news prepared remarks, do we have over 610 minutes already through the through the program itself or participating currently in the program did to ensure that we bolstered the effectiveness of it too we also aligned ourselves or local banks.

It seemed to have that degraded success early on in terms of getting the the loans to the end customer, which was our retail or yeah. When we look at the program to date I think and it's been very effective we have over $20 million either approved.

And or submitted for loans. So when you think about substance I think that that's that's barely charities very substantive [noise].

And we continue to work through this and if the if the program as relates to the government in terms of government assistance continues to expand.

We have the infrastructure in place to continue to support that and to provide further assistance to those retailers that they they navigate P.P.P. process and the other mental processes for for assistance.

[noise], Okay, Great and then just secondly, you know with respect to Albertson's you know it's an I.P.O. is successful could you just remind us [laughter], how your steak would be treated and or tax.

[noise], Yeah High school and so <unk>.

If if it gets if something was to get done you have to step back and look at where we we we have a basis of about $140 million.

Portion of the investment was previously held in the week and then there's another portion that was in our T.R.S., which has now been merge back into the read.

We know that based on the studies that we've done and where we stand that the Max packs is roughly $50 million in total on everything irrespective of how big how much capital you wouldn't get from a transaction.

So.

What's gonna happen is if it was to go public.

<unk> that we have today, which is on the cost method would then turn into a marketable security and you would mark to market.

The unsold chairs on your balance sheet and then the cashier getting it's basically like a free equity offering you get all this cash would know what impact the N.Y. because we went on generating N.A.N.Y. from the indefinite.

Thank you guys.

Mm.

Oh next question comes from Germany, and that's what's the M.O. capital markets. Please go ahead.

Oh, Hey morning, Hey, counter I was just opened and get a little more color on on that did that endearing the decision to suspended versus possibly caught it you know you still have a decent amount of cap actually dealing with the the slide reduction you outline.

Coverage was yours pretty tight to Florida. So what is there a thought at all to use this opportunity just got a right side that now branded got something you know maybe we should be looking at in the coming corridor and therefore, it's it's funny or just the right first that perhaps we how should we take about that.

They Jeremy Yeah. It's a good question look I think we're all very much in the early innings of of this pandemic and we want to get more color on how may plays out how June plays out and really see the amount or rubber collecting before we can really get an understanding of hopefully how the <unk>, how the or the economy open.

Back up and how are retailers respond and so it's all about clarity and I think the board has discussed a number of different scenarios of what may or may not happen and the tricky part is is nobody has a perfect crystal ball with what we're dealing with today and so the suspension is exactly that and we we we did to comment dish that that that it will be reviewed.

<unk>, because we do want to keep the board in constant communication to understand all the ins and outs that we are skiing and the different scenarios that may play out and the taxable income piece, that's going to be critically important as well. So there's a lot of different scenarios that may play out we think suspending it was the right move today, we think reviewing it.

<unk> is the right move going forward and that way, we can move quickly if and when we need a and we know we need to reinstate it we've made that comment before we made it in the press release admitted it not remarks, and so it will be reinstated in 2020, and we just have to understand what that level at the right point is is going to be things clear up a little bit more.

Oh, Yeah that's helpful.

Site going from they are in terms of the pearls ever granted to 14% that was mentioned to cover some tenants that were in the pain camp for April and if so how much is from that group that actually paid in April versus coming from that balk at that getting.

Can you just I guess clarify the question just wanting to.

Understand what was asked.

Yeah, I think there you know these deferrals get thought of that.

You know being granted towards you know the 40% that didn't pay you April round, where in reality I think.

Some of the tenants that have paid did so it's a game more favorable standing and so I'm guessing trying to figure out it up there just follows that were granted if some of those comes from that candidates I paid in April versus the bucket that didn't.

Got it yeah. It it it it varies it's really case by case you know those some sometimes in the in the early discussions as all of this started doing bold some retailers tried to take a very hard position early on and then that position evolved and changed acknowledging that that they had.

Financial obligations to me and so they pay for rent with nothing tied to that but it. It really is always the case by case. So it's it's hard to.

I'd say contextualize exactly you know it'd be one thing or another.

So <unk>. So can we are shown that you're possibly were some kind of containers all that might get rector for her and for may or June it that I got starts where I was going with it is harder potential future you know our expectations, we need to be thinking about from tenants appeared and not just so clean and.

This is a group that getting guy and those are they on what you get into flows.

Yeah, Yeah, I mean that that could very much be part of the discussion as well as Carter mentioned earlier, you know other considerations in terms of loosening restrictions within leases and providing more favorable terms to to ourselves in a landlord.

That will enable us to do other things in the future. So it's all of the all of those points are are discussions and negotiating points on the table.

Oh thanks.

Mm.

Oh next question will come from venture to Boneless Greenstreet Advisors. Please go ahead.

Hey, good morning, Ross could you provide a little more color on the conversations taking place and then transactions market today, how are people thinking about stable stable I've done a wine Capri in this environment.

Sure the morning, I know, it's early for Ya.

You know that that really is the the challenge today is that the the lack of clarity that the retailers have I intend to be opening it's very difficult for a.

<unk> in acquisition to take place when you analyze so uncertain. So as I mentioned previously there there are opportunities or attempts to try and box in what that risk maybe.

So you have seen some conversations are related to trying to understand which tenants are paying which tenants are not paying who you may want to try to you know box in an escrow agreements for where to cover some rent for a period of time, but I would say right now the vast majority of investors or or you know.

Owners that have capital are really a bit on the sidelines right now just waiting to see how it unfolds, if they're becomes a a period of more distress or dislocation I think we and and some others are ready to take advantage of it but right now it's it's really been a situation where you know I heard a quote that I like that in the first quarter the the planes.

We're in the air landed and and not a lot of planes have taken Austin. So we're waiting to see when when there's clearance to fly again.

Makes sense I mean in your mind, what needs to change maybe to unfreeze the transaction market I mean, it just more than you know country reopening rent payment you know, we'll rent collection levels getting back to you know normal English levels are <unk> well, what's the news criteria in your mind to kind of good things moving again.

Yeah, first and foremost there needs to be a comfort level in the country that it's safe to to Reemerging and to start shopping again and for D. retailers to open even in some of the state than the counties, where reopening plan to have started to to exist not on the retailers I'm, hoping that even if they're capable are allowed to legally so.

We're still a little bit early and people getting comfortable whether it be testing capacity or or ultimately a vaccine. So as soon as I think there's a a return to normalcy and there's a better understanding which retailers in which categories of retail will open it and and what that looks like or their capacity issues are.

<unk>, you know theaters fitness going to be able to to return back to 100% capacity as soon as we have more clarity in that scenario I think both investors and lenders will become a little bit more comfortable in Ah loosening. The you know the purse strings and starting to invest again.

Oh that makes sense. That's helpful color one more just quick one for me if I could what is the preleasing level at the Boulevard.

That all in recent months due to the pandemic.

Yeah right right now we were in we're close to 90 per cent on a pre we've seen what the boulevard yeah, nothing nothing exchange at this point. So yeah. We can do you need to do our fit out work with with all the retail tenant there's conner mentioned earlier.

The it was deemed essential we got the waiver shop right is <unk> under way, we're going through the inspections and then for the balance of the shopping center, we continue to do her for that work.

Yeah, you into a huge kudos to our team that went above and beyond to get those waivers because it was not easy and to get it expeditiously and get it you know back to having you know the the construction workers on site was was not easy. So I I think all the team that's been working on that because it's been pretty incredible to see how a site that was.

Slows down in essence from the shutdown to quickly ramp backup was pretty impressive.

Thanks to include you take the next question will come from floors then.

<unk> <unk> Compass point. Please go ahead.

Hey, Thanks, guys.

Thanks for taking my question a quick <unk> couldn't you remind us again, what your break even rent collection is to to cover your your your ongoing a expenses.

Yeah high flow. If you if you look at like you know run rate you know total expenses G.N.A. operating expenses property level interest expense all that kinda stuff. It runs about 150 million a quarter.

So you know somewhere roughly in around 50 million a month.

So what <unk> what percentage of the cash rents would you need to collected to get to that level.

Well, we're we're above that with our 60% so we're more than right.

What what we have we are.

Is that in in the okay, but is that in the mid fifties.

It's probably around the 50 per cent level has to do the math, specifically, but it's around that.

Okay.

Another question, maybe for you Glen as well.

You're straight line receivables you it doesn't appear like you've taken any write downs on any of that could you walk us through how you think about some of you or riskier tendencies and and and also maybe you know talk about that in terms of the the bad debt which was for.

A million relative to the 1.7 million last year, how how much of.

How much of as the Cove it impacted your your thinking about your your your candidates.

[noise] well, let me let me just plug generally about just a our reserves as it relates to us.

He is a is a practice have always had reserves again straight line. So the number.

Under that appears in our supplemental that is net reserves.

So we have reserves up are ready and pretty robust policies and procedures and how we analyze tenants as we go forward now the pandemic makes US review those procedures and policies make sure they're sufficient for the current environment.

But we we've always had maybe a little different than others. We've always had reserved again straight line good times and bad. So we you don't see a whole lot of movement, there because that that actually using net is number. So there is a there was a sizeable reserve again straight line today.

The hey are the bill they are and what we call and build day are which is our you know they can the tax that you're accruing as you go along we have very significant reserves there as well.

And again very again, what we believe are extremely.

Very robust policies about how we looked at it and we go tended by 10, <unk> least by lease and making determinations about the appropriate level of reserves now do I think the reserves will go up in the second quarter I do but I think as a 331 the reserves are very adequate.

Unclear about where things are.

So I don't I don't you'll see movement, but I'm not I'm not expecting drastic movement as it relates to R.A.R.. The 4 million that you saw.

The water, which is you know <unk> <unk>, it's roughly 138 basis points as you know we we carry in our forecasts in our budget around 100 basis points for a year. So that at 138 basis points is roughly 35 basis points for a quarter so even realm.

To our original plan, we still have 65 basis points available to us and I would also tell you that a portion of the reserve taken was really related to one tenant that's still operating so and then if it's really sad to say away gross or in in planes you for us that was about a million dollars of the reserve.

There's still operating so that then they come back to us too.

<unk> <unk> <unk>.

Our next question won't comes from handle say adjust with Mizuho.

Please go ahead.

Yes, good morning, I'm glad to hear from doing well, especially you Connor.

So my first question is on the the nonessential rent.

On your coded update slide that bucket comprises just under half with your your wet 43% it looks like and it looks like you collected 42% from that group them April and received a phone request for another 21%. So I'm trying to get a sense of how we can understand that what do you expect from the 37% with not <unk>.

<unk>.

The boroughs and then maybe you could show some thoughts on how you see a probability collection for this group overall versus safety central into police could see a narrowing the gap between that and the 86% new collected central bucket. Thanks.

Sure. So I'll I'll try to break this down a little bit and make sure I address all parts of your question [noise], except for those that have not requested any to pearls. At this time you know it it could be it for a variety of reasons one day, they're continuing to operate or they're still paying a that can be closed in pain. It also means that they just.

I've been going through the the loan process and wanting to wait to to see gay more visibility into what type of assistant they could secure it to to meet their financial obligations with us in our lease now we have seen that actually happened a couple of times for those that had requested deferrals had since called us back and said that they are willing to pay rent because.

Just got the P.P.P. alone [noise].

Said, they're able to eat that obligation. So it really does vary in terms of you know collectability on the back and again. It's it is still too early to tell where only six seven weeks ended so you're going to have to to play that out a a little bit further to understand.

Exactly you know as market start to reopen and these retailers started to get back in the swing you know what that looks like.

And I do apologize, but I think you have one last part to your question.

I was just looking for some perspective on the two buckets, if we could see some narrowing it I think you somewhat address that but no. The crux of my question when there's a big chunk here that hasn't either paid or requests the pros and was really trying to get some clarity on what the nature of conversations and once you understood to be good.

Okay, Yeah, I I think I think but I just mentioned probably answers that best.

Yeah. That's wonderful. Thank you and then maybe a question so you're glad just want to clarify on the collection numbers were seeing here. It looks like it's based on E.D.R. in other words total occupied total potential not necessarily based on a an occupancy based none.

<unk> in a sense that if you had a lower occupancy you would benefit because you have less <unk> to collect just want to make sure because there's a lot of numbers being thrown out there in the industry right. Now some are based on total potential 80 are assuming 100% I can between some are based on.

Current occupied.

We are some are putting came in I think it's still it's important I just wanted to make sure I, we understand what's what's being reflected here.

It's strictly based on bill they are.

Okay.

Simple, it's not complicated it's it's the build a are for the month of April.

Came down I think you're talking about what would it be you include the the.

Came in the other recoveries, it's comparable to what we collected.

Got it okay.

Thank you guys.

Yeah.

Oh next question, what <unk> capital one please go ahead.

Morning, guys.

I guess too quick ones for me <unk> as it relates to the deferrals you guys have like a weighted average duration by D.R. that you that you could provide just in terms of how long the pearls or across or the 14%.

I know right now and I mean, some matter how I'd give it I think addresses earlier it really is a case by case.

<unk> and you know as as they also stated earlier somebody used it for a minute that were issued to some of these retailers have started to get paid back just because they'd secured the loans. So it. So it is still very fluid Ah well I better visibility as as we progress through this you know over the next couple of months.

Okay, and then Glenn right.

Earlier, you your comments mentioned something about a a mortgage I think you did it looks like you. There was a sleeping mourners pushed out 90 days I guess I'm, just curious as to what you're seeing.

Direct lending market in terms of how people are underwriting works or not if they pulled back just you know maybe some commentary about what's going on on the the mortgage market would be really helpful.

Yeah. So so we we have we had we have a property in in the Bronx Conquest Plaza right near the Yankees Stadium that was really a a development project over time with our partner with 50 50 partners. So we had alone that was maturing.

In in in 2020, and we source a new loan for higher proceeds actually at $75 million and closed on it in early April so to new seven year loan at a 3.13% so actually the cost savings for the partnership and extend to determine that much longer <unk>.

The mortgage market is very very specific as to the.

Yeah.

Property that you're looking to finance you know for a while the the C.M.B.S. market froze for that bank lending is has its level of challenges I would say more the money big money money sent a bank than it is at the regional banks I think the regional banks are still very active the other thing I could give you some.

Just some visibility on is.

Again on the residential side, the Fannie and Freddie market is completely operating in functioning.

And for the right assets, you can still clearly get mortgages and financing for term.

And incredibly low rates.

<unk> on on the multi family side construction financing have you guys looked at that in terms of what what's available and how that's being under <unk>. We we really haven't we we don't have actually any construction financing as a matter of fact, the one construction loan that we did have which was on dania, which was six.

<unk> $70 million, we paid off during the first quarter.

So we actually have no construction financing, we haven't been outsourcing it.

I believe if we wanted to quite candidly if we wanted it gets construction financing I think with the banking relationships that we have we could have painted.

But it's not something that we are.

You know doing at the moment.

Okay. Thank you.

<unk>.

Oh, Yes question will come from call inmates with Raymond James. Please go ahead.

Banks and good morning, I just wanted to go back to the transaction marketing you touched on albertson's, specifically a bit but if we've just reflect on Kim coats history and the plus business can you may be just expand on your potential appetite for any similar opportunistic investment as this cycle plays out and how would you balance these types of investments versus obviously the near.

Focus on liquidity or potentially ramping backups to me development opportunities you've stuff.

Sure I think when you look at the strategy of can't go we've always had the opportunity bucket, where we look at retailers that are real estate rich and that's how close to 10 years ago, we wound up with the albertson's investment of owning close to 10% of that that grocery chain they still own in control.

Oh I'm close to 50 per cent of their real estate and you know the original thesis there was that the real estate alone was was was so valuable that it would make sense long term and clearly the operations now have been a shining star in the grocery sector. We still believe it there's gonna be opportunities for that what we call the plus business I'm going forward.

We have been focused on making sure that we try and harvest our existing plus business investments before we go and start to make new investments just against so we can build on the the wonderful track record that we've had over the decades of investing in those types of opportunities that being said, we think it's it differentiator for can't go we think there's gonna be opportunities ahead of us.

Where the plus business will be utilized and come in handy to really create opportunities because we do think there's going to be a significant amount of dislocation.

And if we're one of the few that have the capability to underwrite the capability to invest we think it will reward our shareholders.

Okay. Okay. So it sounds like that that does remain up again <unk> more of an intermediate a longer term priority.

We always have it as part of our our differentiated strategy. You know, we we obviously have a a very solid pure one portfolio, where we are laser focused on executing are are <unk> are 2020 vision strategy. You know if you think about it over the past two years, how would transform the asset base, how we've gone long on the balance sheet <unk> a lot of the effort.

That we've made has really position to ourselves to be ready for this type of environment. So that the mother ship can continue to to to to hopefully outperform but the <unk>. The bucket that we have for the plus business is always unique and opportunistic when those present when those opportunities present themselves and so we're ready we think it's the differentiator for.

And we and we think it will really reward our shareholders in the long term.

Okay. And then gave you spent some time discussing the curbside program, but to the extent social distancing becomes more of a focus going forward are there any other longer time changes you've already started to work on with tenants in terms of expanding outdoor seating for restaurants or anything else along that line. If you just think about the actual physical location or the.

The physical layout of your property.

Yeah, Yeah, Great question, I mean, you absolutely nailed that with your example, the I'd be outdoor seating is something that we already talked nor restaurant operators with and we've actually been surveying each it down to.

I analyze those that already have outdoor seating those I want to expand capacity areas in the in the shopping center that we can support that capacity how do we do we manage in in centralize fashion with the appropriate social distance measures do we support the individual restaurants [noise].

And and the outdoor seating that they need so all of that is very much on the table and under consideration.

Yeah between our our development team property management team construction team at least so it's everyone is really a directly engaged in in bats understanding how we can best serve our tenant base and that means going for obviously the situation.

Will evolve different different municipalities in counties have different restrictions and you know that's what we've seen yet through the through the outside is you really have to take this case by case, but we take all 400 of our assets and I've been doing a very much a deep dive on on how do we re format.

Short term and then what are more longer term solutions that will be more permanent.

Alright, thank God.

Oh next question will come from Tibetan Terrier, what some trust. Please go ahead.

Thanks, Good morning, hope, you're all doing well.

You have about three and a half per cent of rent expiring. This year and you have a button that are one per cent that's month to month.

Oh, what is the kind of current game plan to address those.

And how windows negotiation so.

Environment.

Sure. Yeah. This is Dave so in in terms of the current renewables into discussions <unk> those have been ongoing they they are happening pre cove, it and even as we're going through and yeah. The first six weeks here those discussions continue again, the quality of our real estate has.

Vastly improved over the years and so are 400 locations really service you know the community well in service to retailers extremely well I I think what this is proving it that being close your customer in in these markets is really essential and we've been able to server side and the brick and mortar strategy I will be critical long term.

To serve as all these different options to the customer whether it be curbside. Both this you know which has been involving trend and that that looks to just do it will be in in play. It for you know the the long term here and has really been growing over the last couple of years.

So we feel good about that and then in terms of those that are month to month and how we address so we're really looking at you know in a in a very measured way you know, we don't want to get too far out in front of it similar to what we did with the great recession as we can do shorter term renewals for the time being let's get more visibility to how dislikes long term and that we can address a longer term.

Renewal on the back in there.

So I guess what else yeah for about.

About similar to what we've done in the past stark even certain <unk> similar to what we've done in the past recession in the past great recession is you know we we adopted the phrase love the one you're with we recognized you know the existing tenant bases. Your best friend right about now and so we're working with making sure that we love the one you're with and and and bridge them to the other side of that.

Okay does that translate into perhaps to shorter term leases for now for the for the longest anyway very expire.

Not necessarily a again, it's it's case by case, it's hard to to to add a broad brush on it give each situation's different and yeah. When you look at you know that the majority of our retail shopping centres have essential components to it with grocery you know over 77% of R.A.B.R. is associated.

Shopping centres that have a grocery comes on into it.

Those are those are the areas that people want again I mean, it's it's been proven that you know through this pandemic that having a central component is really key and for those other retailers that can code 10 at a cross that are alongside I. They they really do want to stand those those centers longer term, but it's really hard to paint a broad brush over your question is like.

Yeah, I appreciate that and I'm glad because you were very changing the least spread definition, if I look at a supplemental it there was some language that's adjust for that.

No.

No or at least spread definition hasn't changed.

Okay. Yeah, we just change the format the way in the presentation the way it looks.

Okay I just most of the Port you number changed versus what's your imported for for <unk> for for a cue.

Poor definitely.

No.

Doing championships the presentation change.

Alright, Thank you guys.

Our next question comes from 10 me a trick with Wells Fargo. Please.

Good morning, I'm glad you're feeling well Connor just piling up on the commentary you made about loving to one year. When I'm certainly there are a number of tenants that you may not not quite as much as others. I guess is this also an opportunity to address lower quite a tendency where you may wonder we are she takes longer term or is occupancy preservation and such.

Critical level that maybe that's not a consideration at this point [noise].

No. That's that's a good question that I think you look at each and every situation and each and every site individually to make the the best business plan for the long term and so we're always looking to to upgrade tendency, we're always looking to to improve the credit quality as well as the potentially I'd you know I I personally think there's gonna be a lot of opportunity to.

A lot of grocers to our sites that don't currently have a grocery anchor and we're working on that right. Now you know are already close to 80 per cent grocery anchored I think we're going to be up over 80 per cent. That's a challenge that we've laid out for ourselves, but that being said, we recognize that a lot of retailers are going to have their expansion plans put on pause except for those up maybe have been operating through this.

Pandemic and so we do want to take a case by case and you know the the small shops to me are are are critically important because I think they're the secret sauce in terms of connecting with the community. You know every shopping center has sort of the major national credit pen that people are used to shopping in love, but I think the real.

And part of the shopping center is that secret sauce, the local mom and pop because it's typically a generational owner or someone for the community or someone that they really connect with and I think that's where we really want to shine in this type of environment is helping those folks get to the other side of it.

Okay got it on things and then I guess some of your peers are looking to extend the bones to their small shop tenants I'm curious if you've given any thought simply not.

Yeah, It's it's actually something we've we've talked about when we were rolling it off the top program and looked at doing ourselves, but then we realize we should probably prioritize the government programs that are in place because in essence, they're there for a reason and we figured let's make sure the tenets that we have access those programs first and take.

Advantage of those programs and then as you know, we we watched the P.P.P. program closely and see how it's playing out if we need to we have the ability obviously with our balance sheet to step in and help those in need but right now the priority is to focus on the P.P.P.

Okay, great. Thanks, and then if I could sneak one more and I'm curious you are seeing any differences in collectability based upon geography.

We really haven't seen much difference. It's you know right now it's pretty consistent across the board.

Okay. Thank you.

Oh, no special won't come from one to one to time with Jeff. Please. Please go ahead.

Hi, Thanks for taking the question any system to break down in April rank collection for anchors versus the small shops.

It's in these supplemental.

Chris Ah.

You'll find on the supplement on our coded business update.

Linda.

Okay.

I think by and large they anchors were paid and then it just married a lot across the small shops right.

73% of our anchors paid in 44% of our non anchors paid for April.

Thanks for that and then when you look in a pipeline of retailers announcing restructurings. You know are there any strategies to best mitigate the impact of an upcoming increases.

You know maybe anything from Canada maintain occupancy on it shorter medium term basis, and then yeah. Do you think you're scale helps you in this context.

Our scale in our diversity definitely helps I mean, when you look at the diversity of tenant base across the portfolio, it's pretty incredible how diverse we are especially when you take into the just geographic diversity on top of the tenant diversity clearly are watching the credit markets closely our tenants are some of the you know our our.

<unk> 50 has we have the highest and best and great credits of our peer group, but we're watching closely how that plays out clearly there's been a lot of reorganisations load up for equity swaps that we've been watching in in other sectors, but we we were going to monitor that closely and continue to to evaluate the opportunities.

[noise]. Our last question today comes from Christine Mcilroy would study group. Please go ahead.

Hey, it's <unk> with Christie.

Contour, it's great to hear that you're you're doing better, but I wanted to sorta ask you and I think yeah, obviously, you're doing a lot of stuff on the deferral and working with your 10 and.

Oh nice junior paying royalties feed it you can skills for but for when you're with as well.

Did you think about providing equity in stepping into retail ever since obviously been a hallmark of can go for a long time range been leading those initiatives do you view that as an opportunity to day to invest into Rita's put aside the deferrals in the loans.

Ah, but try to make commitments enroll out a much more significant program on that end.

Hey, Michael Thanks for those comments yeah, no. We we look at it the same way we've always looked at it we want to be opportunistic when those <unk> event create this location where retailers that are real estate rich need a partner to come in and unlock the value of that real estate. So we're very care.

<unk>, who we invested in why you can sort of look at our track record back that decades of all the investments we've made and it's pretty consistent theme across the board. We like retailers that are real estate rich. We typically think we have the capacity to underwrite. It we have the capacity if we need to to take back the real estate and help on locked about.

Are you there and so that's what we've been focused on over the years. It's been a good track record for US we want to see their parents plus investments pay off we anticipate them to continue to perform and hopefully there'll be some more dislocation in the in the near term that'll create opportunities for us. So that we believe as a differentiator can really shine and create a lot.

Value for shareholders.

I guess is that an initiative right now you already have had relationships with private equity firms I'm just trying to get a sense of you know they say a lot of these retailers are struggling chapter 11 filing for rising pretty dramatically.

So I just don't know, whether that's an active dialogue and I I like it is back they did your <unk> or yup, though it. It is part of our strategy. It's always been you know a kimco differentiator it always will be and we've been looking at that you know it's lumpy as you know it's not the easiest thing to model, which I know, sometimes called you a lot of eggs, but we do think it's an opportunity.

<unk> for us at the right time, and we haven't seen it happen yeah, but we think the window is going to be opening your shortly for us to take advantage of it.

And then on the dividend and you know so it's the suspension when you're in the review monthly <unk>.

What happens when you do reinstate give you that as a it you'll want to catch shopping pay the you know whatever dividends didn't get paid in a quarter <unk> is it just then when you reinstated since going to be on a go for basis, whatever new rate you will feel comfortable with from a payout ratio perspective, how should the market think.

About the suspension.

Yeah. It's a good question Michael It is very very early we're gonna ticket month month, we use that monthly review specifically because we do think we're gonna have to have these updated calls monthly with our four to give them where we sit from May from June from July and then <unk> reinstate it where we think we you know, we'll we'll have competence obviously in in.

Covering it didn't matter it'd be sustainable for the long term, we we know that the dividend is critically important to the investment thesis of can go shareholders and we want it to be tied to taxable income into our cash flow and as we get more information as the board Digest. The information that's coming in daily weekly monthly will be in a position.

To reinstate it where we believe for for the long term it'll be in in a good spot not only for for the existing but to grow overtime.

So in this case she may have a top up dividend can meet taxable income in any new runrate quarterly dividend that you'll feel comfortable going to the future.

It really depends obviously on on the situation, though that's transpiring in front of US a lot of options are available to us a lot of lovers that we can use but that is part of the that is one of the optionality that we have that that we can look at when we get a little deeper into it.

When you feel from the pain get in stock then you know with having the ability to go 90% stock.

The idea of just spending with it better outcome, then giving script to your shareholders.

We felt like suspension was the right approach at this point just because there's there's such a lack of clarity you know obviously with a change to from 80% to 90% of the stock is short that would do it and stuff and that's an interesting option as well and again, we've is aboard discussion that we've been having regularly they'll continue to monitor the situation and.

I I believe that I've as this gets a little bit deeper and we get we were hit the ability to see a little bit more clarity then we'll have more information at our hands to put it back in place at the right level.

Yeah in the last thing <unk> with some of the state to municipalities have reopened do you have any tenant tales from the stores or the restaurants that have opened in your portfolio is there any anecdotes you can share about the pent up demand that's going on me economy when things go reopened.

We don't have any specific sales yeah, obviously since it's only been a couple days, but we have seen you know we do have conversations with store managers that we have relationships with and obviously the curbside pickup program that we've launched we have a lot of dialog surrounding that they've been very pleasantly surprised with the the curbside pick up in the.

The accessibility and they used to that they have been happy so far. So we we we were continuing to monitor that closely but we don't have any have any sales area.

Yeah. Thank you.

That's concludes our question and answer session.

Really close friends back over 10 favorite bunch. Thank you for any closing remarks.

Thank you for participating are all today I'm available to answer all questions. You may have I hope you and your families are staying safe and healthy during this crisis and hopefully my next call. We can do this and they're more normal life setting. Thank you everybody bye-bye.

<unk> smell concluded. Thank you for 10 million slows presentation, you may now just to know.