RioCan says most of its commercial tenants are paying rent

RioCan REIT says the commercial real estate sector is struggling, but most tenants have stayed open and paid rent.

One of Canada’s biggest commercial real estate owners and operators says the sector is struggling with ongoing COVID-19 lockdowns, but most of its tenants have managed to stay open and pay their rent.

RioCan Real Estate Investment Trust said Thursday that only a quarter of its tenants were closed at the end of 2020 and it classifies almost 80 per cent of them as “strong” or “stable” because 98 per cent of total gross rents billed to these tenants have been collected in cash.

“Most of these tenants are going to survive, and we’ve collected more than 80 per cent of their rent,” said Jonathan Gitlin, RioCan’s president and chief operating officer.

“Some of these tenants, such as restaurants and gyms, while they’re vulnerable in the face of COVID, in our minds, they make up a very important part of the retail landscape and we think they will do just fine in the future.”

Gitlin’s remarks came as RioCan reported its fourth-quarter net income amounted to $65.6 million, down from $150.8 million at the same time last year.

Funds from operations (FFO), a key metric in real estate, reached $124.1 million, a fall from $146.1 million last year. The trust said its FFO per unit amounted to 39 cents per diluted unit for the quarter ended Dec. 31, down from 46 cents per diluted unit previously.

It reported a net loss of $64.8 million for the year, compared to a net income of $775.8 million in the prior year.

Gitlin will take over the chief executive role in April from Ed Sonshine, who said that Thursday’s earnings call was his 108th with RioCan.

“Thank you to everyone for putting up with me for 27 years,” he said.