Edited Transcript of CHP.UN.TO earnings conference call or presentation 23-Apr-20 3:00pm GMT

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

As one of Canada’s largest landlords, we have an important role to play in helping Canadians and their businesses during these unprecedented times. Earlier this month, we announced that we’re assisting qualifying small businesses and independent tenants with a temporary rent deferral. To date, we have deferred approximately $5 million of monthly contractual rent, and generally, the feedback from these tenants has been very positive.

In addition to the qualifying small tenants that we agreed to assist with rent deferrals, we have had numerous requests from other tenants asking for rental concessions or simply stating that they’re not going to pay rent during this pandemic. We’re in discussion with our larger tenants who have been adversely affected by COVID, and we’ll consider rent deferral requests on a case-by-case basis.

April rents have now come due. And as of yesterday, we received 86% of the contractual rent. For clarity, the uncollected amount of 14% includes the rent deferral that we have already offered to our tenants.

It is too early to determine how much rent will be withheld in the months ahead as the duration and overall impacts of the pandemic is unknown at this time. However, from a liquidity perspective, we have approximately $1.3 billion of available liquidity on our credit facility, and we are well positioned to weather the current market. Mario will elaborate further on the strength of our balance sheet. But before I hand it over to him, I would like to spend a moment discussing transaction activities.

Dispositions are an important part of our strategy. We look to dispose our noncore or nonstrategic assets on an opportune basis. During the quarter, we closed on the sale of 4 noncore assets for gross proceeds of $135 million. This included the shops at Oak Brook, our only U.S. asset, for proceeds of approximately $98 million; a 50% interest in a residential property in Edmonton for $10 million; and a suburban Halifax office asset for $27 million. We reinvested $22 million of these proceeds into a property in Coquitlam, British Columbia. The asset is directly adjacent to our existing asset on North Rd. and it was a strategic acquisition for its longer-term redevelopment potential. The combined site is well located near 2 lines of the Vancouver SkyTrain station. The additional land assembly will allow us to unlock greater density and improve the site configuration.

As it relates to our mezzanine lending program, during the quarter, the borrower on a $24 million mezzanine loan defaulted. The loan is secured by a retail property in Barrie, Ontario and further secured by 2 other properties where Choice is a joint venture partner. During the quarter, Choice repaid the first mortgage on the property of approximately $44 million. Choice is now the only secured lender on the property and is working with the receiver to ensure proper management of the asset and the sale process. We have previously taken an allowance of approximately $3 million as it relates to this loan.

On the development front, things progressed well in Q1, completing and transferring 6 projects, costing us approximately $20 million. The development program has also begun to see the impacts from the COVID-19 pandemic. In the short term, our development initiatives will likely be impacted by temporary delays due to work stoppages, labor shortages and potential delays in supply chain.

Our 2 largest ongoing projects are the residential development at 39 East Liberty Village and 390 Dufferin, both in downtown Toronto. These projects are in the vertical construction, and to date, construction on the sites continues. While there may be some short-term delays for these projects, they continue to progress well.

Work on planning and rezoning activities is expected to continue with no major delays. However, we do expect delays to the commencement of construction for new development projects. While such delays are expected to be short-term in nature, we are confident that our development initiatives will in the long term provide us with opportunities to add high-quality real estate to our portfolio at a reasonable cost.

I would now like to pass it over to Mario to provide an update on our financial performance for the quarter.

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Mario Barrafato, Choice Properties Real Estate Investment Trust – CFO [4]

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Thank you, Rael, and good morning, everyone.

I’ll begin with the brief overview of our financial results and then I’ll speak to our balance sheet activity.

Overall, our results for the first quarter of 2020 were in line with our expectations and continued to reflect the stability of our portfolio. Our reported funds from operations for the first quarter was $170.7 million or $0.244 per unit diluted. This compares to $169.3 million or $0.252 per unit diluted for the first quarter of 2019.

Included in our NOI were onetime costs of $500,000, comprised of bad debt expenses of $900,000, offset by $400,000 of positive cost recovery adjustments. None of these items were COVID-related.

The decline in year-over-year per unit FFO was primarily due to the deleveraging that occurred in 2019. Proceeds from our equity issue and property dispositions lowered our leverage from a debt-to-EBITDA of 8.1x to the current 7.5x.

Included in our Q1 performance was stable growth from same asset cash NOI. This marks the first quarter that reflects the combined Choice Creek portfolio in the same asset classification. When we compare it to the Q1 2019, same asset cash NOI increased by 1.8%. This reflects — this growth reflects annual step rents embedded within the Loblaw portion of our portfolio as well as incremental cash generated from leasing activity throughout 2019 and Q1 2020.

Quarter end occupancy remains strong at 97.5%, with retail occupancy at a strong 97.8%, industrial occupancy at 97.7% and office occupancy at 92.9%. We did have negative absorption of 124,000 square feet compared to Q4. However, 1/2 of that vacancy will be backfilled in the second half of the year.

Now to our balance sheet.

2019 was a transformational year as we made great improvements to our balance sheet, ending the year with debt and liquidity measures among the best in the industry. We continued to improve our balance sheet in Q1 by adding low-cost, long-term debt to our capital structure.

In the first quarter, we issued $500 million of unsecured debentures for a weighted average term of 14 years and a cost of 3.15%. Financing that now looks very advantageous compared to the current environment. The proceeds were used to repay all of our maturing 2020 debentures. And as a result of this transaction, we have no significant debt maturities for the remainder of the year, thus reducing our risk profile and leaving us well positioned.

We ended the quarter in a strong liquidity position with $1.3 billion of borrowing capacity on our credit facility. In addition, we have approximately $12 billion of unencumbered assets that we can either finance or prune to raise capital.

COVID-19 had no impact to our financial performance. However, it did have an impact on some of the risk assumptions used in our property valuations, resulting in the reporting of a fair value loss of $148 million. These are early days, and we hope to have greater visibility in future quarters on the potential changes in cash flows and risk profile and the impact it will have on our valuations.

Keeping with COVID, our top financial priority in the near term is to maintain a strong liquidity position. This includes capital preservation, maximizing the amounts to be drawn on our credit facilities. With that in mind, we are monitoring our capital expenditures, and where we contemplated using our credit facilities, we are looking at alternate sources of financing.

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

I’ll now turn the call back to Rael.

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [5]

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Thank you, Mario.

Before we open it up to questions, I want to summarize why we believe that we’ll emerge from the crisis in a better position than most. And there are 4 reasons why I say this.

First, our team. I’m incredibly proud of our team’s response to date. They have adapted and remained connected, going above and beyond for their fellow coworker and our tenants.

Second, our portfolio. We own a high-quality real estate portfolio and have a development program that provide opportunities to add high-quality stable real estate assets over the coming years.

Next, our balance sheet. We have a strong balance sheet with over $1.3 billion of liquidity that provides the flexibility necessary to help insulate Choice Properties in the face of all the market volatility.

And finally, our strategic relationship with our major tenant and the sponsorship of a major unitholder. Loblaw is our largest tenant, representing 56% of our gross revenue. Our relationship with Loblaw is strong and will continue to create great opportunities for the REIT. George Weston is our largest unitholder, owning approximately 63% of Choice, and is committed to support our growth plans as a long-term owner, manager and developer of a high-quality diversified real estate portfolio. These relationships will continue to provide stability and growth for Choice.

Operator, we will now open the call for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question is from Sam Damiani with TD Securities.

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Sam Damiani, TD Securities Equity Research – Analyst [2]

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First, just to start off. It’s good to see no impact from COVID in Q1 results. But just, I guess since then, any anecdotal evidence on the leasing front in terms of any impact on the economic slowdown?

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [3]

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

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Sam Damiani, TD Securities Equity Research – Analyst [4]

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

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Mario Barrafato, Choice Properties Real Estate Investment Trust – CFO [5]

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Sam. Yes. I’m sorry. I don’t have an answer to that, but we’ll look into it. It might have been maybe a combination of some of the acquisitions and just rolling into the average lease term balance. But that’s all I can think of right now, but I’ll — we’ll follow-up.

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Sam Damiani, TD Securities Equity Research – Analyst [6]

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

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [7]

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Yes. So Sam, it’s Rael. So again, it’s too early to say right now. But we’re in discussions with tenants on receiving those rents, and we are confident that we will collect the majority of it. But again, it’s really early days.

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Operator [8]

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The next question is from Pammi Bir with RBC Capital Markets.

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Pammi Bir, RBC Capital Markets, Research Division – Analyst [9]

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Can you maybe just comment? Maybe going back to your leasing, I guess, commentary, can you comment on what’s happening or what you’re seeing on the ground in Alberta with respect to your office and industrial portfolios?

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [10]

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

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Ana Radic, Choice Properties Real Estate Investment Trust – EVP of Leasing & Operations [11]

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

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Pammi Bir, RBC Capital Markets, Research Division – Analyst [12]

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

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [13]

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Yes. So it’s again you have to bake it up into 2 buckets. So one is the small businesses. In the small businesses, we had already offered that rent deferral for both April and May. And as we said, it was around $5 million. As for the larger tenants, many of them — I think you have to break it up into 2 buckets again. So some are closed and aren’t operating at the moment and they’ve been significantly impacted. And we’re going to try and work with those tenants. And then some are operating and are just really being opportunistic in this environment. And we are going to try and pursue rent from those tenants as best as possible.

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Pammi Bir, RBC Capital Markets, Research Division – Analyst [14]

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

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [15]

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

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Pammi Bir, RBC Capital Markets, Research Division – Analyst [16]

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

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [17]

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Sorry. Pammi, I do want to correct. There is a small mezz loan that is part of that as part of the other security which we would intend to — which is cross-collateralized. And we made reference to the other 2 properties, and it’s more like — I think it’s sub-$2 million.

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Pammi Bir, RBC Capital Markets, Research Division – Analyst [18]

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Okay. Got it. And just looking across the rest of the mezz loan book, what are your — are there any other potential areas of concern in terms of the financial health of the borrowers or any collectability or repayment concerns?

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [19]

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No. Nothing at this time. And remember, the way we used to look at the mezz loans is it was strategic to help advance our development program. Really, really credible borrowers, credible developers, and we hope to continue to work with those partners. The one in Barrie was a historical relationship, and we don’t have anything else to do with them.

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Pammi Bir, RBC Capital Markets, Research Division – Analyst [20]

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

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Mario Barrafato, Choice Properties Real Estate Investment Trust – CFO [21]

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Pammi, probably of the $130 million incremental adjustment, I would say, probably about $30 million related — was Alberta-related. And then the rest, on the power center side, we’ve taken some big write-downs last year. So — and then — and so the biggest adjustment would have been in those neighborhood shopping centers where it didn’t have a large or significant grocery-anchored presence.

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Operator [22]

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The next question is from Jenny Ma with BMO Capital Markets.

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Jenny Ma, BMO Capital Markets Equity Research – Analyst [23]

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Maybe just to expand on Pammi’s questions about the fair value gains. This is probably getting a little technical. But on the retail side, it was described as being non-Loblaw-anchored shopping centers. So is it really specific to Loblaw, like the grocery stores and in Shoppers Drug Mart? Or is it really more so — or is it just excluding all those reanchored or pharmacy-anchored type of shopping centers?

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Mario Barrafato, Choice Properties Real Estate Investment Trust – CFO [24]

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So the way we described it as non-Loblaw-anchored or nongrocery-anchored, we actually looked at the percentage of income coming from our grocery tenants. And if the percentage of income, I think, was greater than 70% or 80%, we never adjusted those — the discount rates on those assets as was — whereas it was less than that percentage, we adjusted up. And we still think that in this environment, just given what’s going on, it speaks to the desirability of the grocery-anchored centers and just shows how stable it is.

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Jenny Ma, BMO Capital Markets Equity Research – Analyst [25]

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

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [26]

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Yes. Jenny, I think our focus really over the last — especially over the last few weeks has been on responding to what’s going on in the business. And we would expect that while we — in this current, call it, the crisis, we would look to pause that and look to, I guess, revisit it towards the later half of the year.

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Jenny Ma, BMO Capital Markets Equity Research – Analyst [27]

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Okay. That’s fair. And then my last question is about the development. So when thinking about the 2 larger ones that you described, do you think the magnitude of the delay would be mostly commensurate with the magnitude of the economic shutdown? Or do you think there are certain parts of the development cycle that would actually have an extended delay because of all this?

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [28]

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No. On those 2 projects, we just — we caution that there may be a delay. The first one is meant to complete in Q4 of 2020 or I think we may — either Q4 of 2020 or Q1 of ’21. And at this time, we actually don’t think there is much of a delay. We’re just cautioning that there may be a delay.

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Jenny Ma, BMO Capital Markets Equity Research – Analyst [29]

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Okay. Great. And then my last question is with the onetime items that were mentioned. I just want to clarify that they went through the NOI line on the income statement.

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Mario Barrafato, Choice Properties Real Estate Investment Trust – CFO [30]

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Yes. They’re both in the NOI line.

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Operator [31]

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The next question is from Mike Markidis with Desjardins.

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Michael Markidis, Desjardins Securities Inc., Research Division – Real Estate Analyst [32]

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Just on the 14% of nonpay, or I guess, I should say, deferred and nonpaid rent at this juncture, do you happen, by chance, happen to have the square footage associated with that? Would be question one. And then the second thing is just to confirm. Is that a gross rent versus a base rent methodology?

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [33]

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So unfortunately, I don’t have the square footage handy. And then, yes, it is a gross rent.

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Michael Markidis, Desjardins Securities Inc., Research Division – Real Estate Analyst [34]

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Okay. Great. If possible, if you could follow-up with the square footage offline, that would be helpful. The second question I would have is just to confirm on the fair values that you had as of March 31, 2020. Was it only discount rates that were touched at this juncture? It would appear so from the tables. Or were other inputs at this juncture left unchanged in terms of your occupancy assumptions and lease rates and TIs?

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Mario Barrafato, Choice Properties Real Estate Investment Trust – CFO [35]

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

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Operator [36]

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The next question is from Tal Woolley with National Bank Financial.

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Tal Woolley, National Bank Financial, Inc., Research Division – Research Analyst [37]

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

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [38]

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

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Ana Radic, Choice Properties Real Estate Investment Trust – EVP of Leasing & Operations [39]

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

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Tal Woolley, National Bank Financial, Inc., Research Division – Research Analyst [40]

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Okay. And maintenance CapEx for the year, what sort of assumptions should we be using for 2020?

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [41]

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I think from a global assumption, it’s too early to give you a good number. But maybe Ana can speak to the approach we’re taking.

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Ana Radic, Choice Properties Real Estate Investment Trust – EVP of Leasing & Operations [42]

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Yes. Sure. So our focus really has been ensuring that essential projects, we’re focusing on those. So we have projects tied to lease deals and preparing space for tenants. So we’re absolutely moving all of that forward. But as our ability to complete maintenance and improvement projects, it’s being impacted. I mean one of our biggest challenges that we’re facing is sort of logistical in that Loblaw is being our anchor tenant and we have other grocery-anchored sites where we had paving projects and roughing projects. These sites are actually seeing increased traffic and just being — it isn’t feasible to start shutting down portions of the parking garage — or sorry, the parking — yes, the parking garages or those parking areas. So we’re just kind of taking a wait-and-see approach there. And also coordinating roof replacements with our tenants who are really focused on operating their business. So that’s kind of resulting in us having to just push projects further later into the year and some might go into next year.

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [43]

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Yes. So as Ana said, we see it as a huge benefit that our major tenants or our grocery stores are so busy, and we have to delay capital because of the operations being busy.

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Tal Woolley, National Bank Financial, Inc., Research Division – Research Analyst [44]

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

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [45]

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Yes. So it’s maybe not regional, but it would be — you would expect the tenant, especially the ones who are not operating. So if it’s the fitness users, obviously, would be a large nonpayer. I don’t know, Ana, if you want to give any other color.

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Ana Radic, Choice Properties Real Estate Investment Trust – EVP of Leasing & Operations [46]

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No. I mean it would — predominantly, it is both national and regional tenants who have been completely closed. Obviously, any sort of fashion or consumer goods groups are being impacted, restaurants, for example. And then we have tenants who have been forced just to do drive-throughs and so forth. So they’re also requesting we talk to them about how we help them in this situation.

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Tal Woolley, National Bank Financial, Inc., Research Division – Research Analyst [47]

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

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [48]

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No. Look, right now, our focus has really been into responding to what’s going on in the business. Over the longer term, our strategy is the same, acquiring high-quality assets. And clearly, we are in a far stronger financial position than most and our properties are clearly performing better than most. So as things start to stabilize, we definitely will look to be a net acquirer of assets. And Weston has been a great financial sponsor and a very stable unitholder for us.

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Operator [49]

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The next question is from Himanshu Gupta, Scotiabank.

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Himanshu Gupta, Scotiabank Global Banking and Markets, Research Division – Analyst [50]

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So just on the rent collection discussion, how do you balance the long-term tenant viability versus a short-term rent collection? I mean are you prepared to offer some kind of rent abatements or introduction or free rent in the near term maybe as opposed to providing some kind of tenant allowance for replacement tenant down the road?

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [51]

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Look, I think it’s going to evolve as this goes longer, Himanshu. Right now, we are speaking to tenants about deferrals and not yet abatements.

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Himanshu Gupta, Scotiabank Global Banking and Markets, Research Division – Analyst [52]

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Sure. And maybe on the deferral side, around 16 days period. I mean based on your analysis, do you think — is that period enough for smaller tenants to survive this kind of market turmoil? And how confident are you in terms of eventually collecting this amount? I mean any sense on bad debts at this point of time? Or is it too early to say?

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [53]

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Yes. I think you said it best. It’s really too early to tell right now. And then different provinces are going to hopefully start getting back sooner. So again, we’ll probably have more to report next quarter. And then the other thing we are quite positive on is the government is obviously speaking about assisting small tenants, and we’re obviously tracking that, and we think it will be very helpful.

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Himanshu Gupta, Scotiabank Global Banking and Markets, Research Division – Analyst [54]

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Sure. And in fact, my next question was on the government stimulus. And do you have a sense of what percentage of the smaller tenants have qualified for any kind of stimulus? Or we are still waiting for more details to be coming out on the stimulus programs?

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [55]

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

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Himanshu Gupta, Scotiabank Global Banking and Markets, Research Division – Analyst [56]

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

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [57]

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Yes. We prefer not to speak about any specific tenant names. But as we said earlier, we’re really only in discussions on deferrals, not on the abatements.

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Operator [58]

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Your next question is from Sam Damiani with TD Securities.

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Sam Damiani, TD Securities Equity Research – Analyst [59]

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

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Mario Barrafato, Choice Properties Real Estate Investment Trust – CFO [60]

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Sam, yes, I mean, right now, we’re just treating everything as — is revenue with the receivable, and we’re just delaying the collection. And we’ve had discussions kind of like when do you realize, absent an insolvency, when do you book it. So we’re going to kind of play it case by case. And this — we’re not actually sure where the disclosure will be, but obviously, if it’s significant, there’ll be fulsome disclosure.

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Operator [61]

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(Operator Instructions) The next question is from Mike Markidis with Desjardins.

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Michael Markidis, Desjardins Securities Inc., Research Division – Real Estate Analyst [62]

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Just a quick follow-up and apologies if you covered this when Himanshu was asking about stimulus. But Rael, you did mention and remind us of the — I’m going to get the acronym wrong, but the Canadian Commercial Rent Relief program, and I realize the government hasn’t released any details. But in your discussions with sort of, I don’t know, I guess the term would be [logos] or anybody in the industry, have you — any sense on how that might work or how that might potentially assist you? I mean, aside from the obvious. I’m just trying to think of the administration and who the money flows to.

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [63]

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Again, look, let’s wait for more disclosure. We don’t want to give misinformation on the call.

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Operator [64]

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

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Rael Lee Diamond, Choice Properties Real Estate Investment Trust – President & CEO [65]

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So we want to thank everyone for joining us on today’s call. Please do all you can to stay healthy and be safe. Thank you.

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Operator [66]

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