Commercial owners offer rent deferrals in coronavirus shutter stores – National

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Major commercial owners in Canada are offering rent deferrals to tenants as the COVID-19 pandemic forced many businesses to close their stores.

RioCan, Prime Properties and CT real estate investment trusts all said on Monday that they were working with tenants who needed support due to the financial difficulties associated with the epidemic.

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Owner Loblaw Choice Properties REIT has said it will grant rent deferrals of 60 days on a case-by-case basis for small businesses and “eligible” independent tenants.

“We understand and recognize the extraordinary financial pressures on parts of our tenant base, particularly small independent businesses,” said Choice President Galen Weston in a statement.

Choice REIT, which holds 6.1 million square meters (65.8 million square feet) of rental space on 726 properties, says it also withdrew its outlook for 2020 due to uncertainty about the duration and the impacts of the pandemic, but that it is well positioned to resist volatility due to its high proportion of necessity-oriented retailers.

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RioCan, which has approximately 3.6 million square meters of leasable area on 220 properties, said it would offer an automatic interest-free rent deferral of 60 days to independent commercial tenants who requested relief, to be reimbursed over one year .

“We are committed to supporting all of our stakeholders during this difficult time,” the company said in a statement.

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Canadian Tire owner CT REIT said he was “determined to work with those of our tenants who need our support,” but did not provide details on his rescue plans.

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The company stated that tenants representing approximately 6.2% of its annual base rent are currently not open or operational, and that tenants representing approximately 2.8% of their annual base rent have not paid their full rent the 1st of April.

CT REIT, which owns 2.5 million square meters on 350 properties, says tenants representing 33.5% of its annual base rent operate on a limited basis, including 132 Canadian Tire stores that now only serve customers through a curbside pickup or online. .










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The deferral options come after the retail segment of commercial real estate saw a huge drop in payments in April after many stores and restaurants closed.

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Payments vary widely between real estate companies, but CBRE vice-president Paul Morassutti said that, anecdotally, he heard from owners of large shopping centers that only 15-30% of retail tenants had paid a rent for April.

“When you sell stuff, or when you sell food or cut hair or whatever, if no one is allowed out, you know, it’s devastating. “

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He said the magnitude of the problem meant that almost all of the landlords had granted some sort of deferral.

“I think all homeowners in Canada, except maybe a few little ones, are flexible, because they have to, they have no choice.”

The rental problem on the commercial side mainly concerned the retail sector, offices, industries and even multi-family buildings having held up relatively well, he said.










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Rent payments could be a bigger problem in May with a full month of business disruption above half a month, but government programs should also have been rolled out by then to give some cushion, said Morassutti.

Government programs could help alleviate the blow, but the key issue is the duration of the epidemic and the forced closings of businesses to combat it.

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“I think most restaurateurs would tell you that they have about a month or two of cash to get them out of a crisis, many of them not even that much.” So will there be enough government assistance to save them all on a large scale? I hate to say it, but the answer is probably no. “

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He said if the virus is relatively short-lived and restrictions are relaxed by summer, things could bounce back significantly, but it will be a whole different picture if it drags on.

“If our approach to containing the virus spits, and if it really continues, there will obviously be a significant impact on the real estate industry. “










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