The head of RioCan Real Estate Investment Trustblasted the federal government’s rent assistance program as riddled with a “painful application process,” although the retail landlord said that it is continuing to adjust to the new reality brought about by COVID-19.
Ed Sonshine, chief executive officer at RioCan, said that the qualification criterion of having lost at least 70% of sales during May and June barred the majority of RioCan’s clients from receiving CECRA benefits.
During the second quarter, RioCan suffered a net loss of $350.3 million as roughly two-thirds of its tenants were forced to halt their in-store operations. The landlord’s rent collection shot up to 85% in July, however.
“The types of tenants that did not pay rent were largely fashion tenants. But we are confident in the collectability of most or all of that rent because for many of them, their only choice is to go into creditor protection,” Sonshine said in a conference call, as reported by The Financial Post.
Sonshine said that the company is steadily steering its rent portfolio away from apparel and department store retailers,a process that he said was already underway even before the coronavirus outbreak.
Sonshine expressed confidence that the landlord will thrive despite the myriad challenges of the present climate. He estimated that 75% of RioCan’s portfolio now comes from “necessity-based” and “service-oriented” retailers like banks, pharmacies, and grocery stores.
“This has been the most unusual quarter in my 26 years of being CEO,” Sonshine said. “But what we are going through now is temporary. Human nature will need gathering places and social interaction and RioCan owns properties where this will occur.”