Thank you and good morning everyone. I am Jennifer Suess, Senior Vice President General Counsel and Corporate Secretary for RioCan.

Before we begin, I would like to draw your attention to the presentation materials that we will refer to in today's call which were posted together with the MD&A and financials on RioCan's website earlier this morning. Before turning the call over to Jonathan, I'm required to read the following cautionary statement.

In talking about our financial and operating performance and in responding to your questions, we may make forward-looking statements including statements concerning RioCan's objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions and similar statements concerning anticipated future events, results, circumstances, performance, or expectations that are not historical facts. These statements are based on our current estimates and assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from the conclusions in these forward-looking statements.

In discussing our financial and operating performance and in responding to your questions, we will also be referencing certain financial measures that are not generally accepted accounting principle measures, GAAP under IFRS. These measures do not have any standardized definition prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other reporting issuers.

Non-GAAP measures should not be considered as alternatives to net earnings or comparable metrics determined in accordance with IFRS as indicators of RioCan's performance, liquidity, cash flows, and profitability. RioCan's management uses these measures to aid in assessing the trust's underlying core performance and provides these additional measures so that investors may do the same.

Additional information on the material risks that could impact our actual results and the estimates and assumptions we applied in making these forward-looking statements together with details on our use of non-GAAP financial measures can be found in the financial statements for the period ended March 31st, 2021 and management's discussion and analysis related thereto as applicable together with RioCan's most recent annual information form that are all available on our website and at www.sedar.com.

Thank you, Jennifer. Thanks so much for that opening and thanks to everyone for joining us today.

I'm so pleased to be surrounded by RioCan's phenomenal senior leadership team my colleagues Qi Tang, Andrew Duncan, John Ballantyne, Jeff Ross, Oliver Harrison, Jennifer Suess, who you just heard from; and Franca Smith who I'll introduce you to in a few moments. This is a team that leads the 570 members of the broader RioCan Group.

This bold, adaptable, and entrepreneurial team is RioCan's greatest asset. They've made it significantly less daunting to navigate this very tricky environment.

I'm grateful for their support and constantly impressed by their innovation drive and unwavering commitments to our business. As I focus now on the first quarter in the business environment, I also want to share my confidence in RioCan's long-term value creation strategy.

On the circumstances that have been brought on by COVID are indisputably tough, but I'm an optimist by nature. Metrics continue to be distorted a little by this pandemic, but when it reflects only on the current conditions, we're overlooking the vast number of levers for future growth that we at RioCan have at our disposal.

Our focus is obviously on responsibly managing through this crisis, however, we're also looking beyond it. With the acceleration of this vaccination rollout, we will emerge poised to capitalize on the pent-up consumer activity that will benefit our tenants and ultimately, you, our unit holders.

The existing conditions are short-term and simply do not reflect or alter our long-term growth potential period. Now, I'm going to focus on our Q1 operating results and despite forced closures during a significant portion of the first quarter, RioCan collected a total of just under 94% -- 93.9% of our rent for the first three months of the year and for April, we were at 93.6% of gross rent.

Rent collection will continue to improve as tenants receive funds from Sears and Q which have been extended out until September 25th, 2021. Our rent collection has taken center stage in our results for the past four quarters.

But you know what I'm pleased to talk offense for a moment and shift the focus to our very strong leasing efforts. We're seeing a stronger leasing environment and this has been evidenced by our completion of 1.1 million square feet of leases and renewals in the first quarter.

For context, our new leasing in the quarter exceeded that of the same quarter last year, which was as you can all remember pre-pandemic.

Thank you, Jonathan and good morning, everyone. Thank you all for joining us.

When COVID-19 was declared a global pandemic more than a year ago, few of us anticipate that it would carry into 2021. While the end is in sight with the rollout of the vaccine, the pandemic continued to impose challenges to the retail sector with the number of lock down throughout the first quarter of 2021.

As Jonathan highlighted, despite this operating environment, RioCan delivered strong Q1 operating results, including leasing, rent collections and development progress, et cetera. Now, let us take a closer look at the drivers of our FFO per unit for the quarter.

Q1 2021 FFO per unit was $0.36, excluding the $7 million debenture prepayment cost. This was $0.03 lower than the $0.39 for Q4 2020.

This quarter-over-quarter change was largely driven by a one-time $5.8 million general and administrative expenses, which were mostly related to the accelerated expensing of certain unit-based compensation and represented approximately $0.02 in FFO per unit. The remaining change was primarily due to lower residential inventory gains and lower lease cancellation fees, partially offset by a low pandemics related provision.

During Q1 we continue to service value of our portfolio through capital recycling, one of the most efficient and effective sources of capital for RioCan to fund value-creation initiatives such as development. As Jonathan touched on earlier, year-to-date, we have aggregated $543 million of closed or firm and conditional deals.

This includes $421 million of income-producing properties at a weighted average capitalization rate of 5.15% based on in-place NOI and about $122 million of development properties with no in place NOI. These deals demonstrate the quality of real cancer assets as evidenced by the pricing negotiated and the well-established partners we have attracted in spite of the challenging environment under the pandemic.

We remain committed to our development program and unlocking the significant value inherent in our portfolio. The vast majority of our pipeline is focused on mixed-use residential development.

It will serve to diversify RioCan's income while addressing the growing demand for housing as Canada's population grows, particularly when the government resumes its immigration plan. The Canadian government is targeting to welcome more than 1.2 million immigrants over the next three years.

This will further drive demand for real estate and fuel retail and residential growth post the pandemic. We manage our development program prudently.

We expect to keep total IFRS value of properties under development and residential inventory on consolidated balance sheet as a percentage of total consolidated gross book value of assets at or under 10 times -- 10%, despite the 15% limit permitted under our credit facility agreement. As of the quarter end, these metrics was 10.7%.

Our development program consists of both residential rental and residential inventory project. The latter refers to condominium or townhouse development.

In addition to meeting market demand for housing ownership, condominium or townhouse project, enable us to accelerate capital recycling to further fund our development program. Currently, such projects under construction or pre-sale include U.C.

Uptowns and a U.C. Tower at our Windfield Farm development 11 YV in Yorkville and QA Condos at Queen and Coxwell all in the Greater Toronto area.

These projects are estimated to provide $133 million to $148 million in inventory gains over the next four to five years, with more projects under development. The first three projects are effectively 100% pre-sold and are under construction, while the new QA Condo project is already 89% pre-sold.

Now let me turn your attention to our balance sheet metrics. RioCan continues to maintain ample liquidity.

As of the quarter end, our liquidity stood at $1.3 billion in the form of cash and cash equivalent and undrawn committed revolving line of credit and other credit facilities. Subsequent to the quarter, the trust extended the maturity of its revolving unsecured operating facility by two more years to the end of May 2026 with all the terms unchanged.

Our mortgage maturities for 2021 totaled $380 million. By now only about $102 million remain to be refinanced.

They are due later this year and are expected to be refinanced in due course. Overall, we expect to continue to maintain strong liquidity throughout the year.

In addition, we continue to have a large unencumbered asset pool of $8.7 billion on proportionate share basis, which generates close to 60% of our annualized NOI and provide 2.2 times coverage for our unsecured debt as of the quarter end. Also at the quarter end, our debt to adjusted EBITDA metric increased from the year-end to about 10 times.

This increase was primarily due to its 12 months rolling nature, with Q1 results reflecting four quarters impacted by the pandemic versus only three quarters that were impacted by the pandemic in the year-end matric. Debt to total assets was 45.3%.

While we expect these two debt metrics to increase marginally in the near term, RioCan maintains its long-term goal of keeping leverage and debt to adjusted EBITDA within the targeted ranges of lower than 42% and 8 times respectively. RioCan's successful capital recycling program and ongoing improvements in operations will serve to reduce these metrics over the medium term.

Over the long term, RioCan target to shift it’s unsecured versus secured debt composition to 70/30 on a proportionate share basis. This transition will take time and will be balanced with credit rating implications cost of debt, debt ladder and liquidity needs.

As of the quarter end, this ratio was 56 versus 44. RioCan is committed to a disciplined approach to maintaining its balance sheet and capital structure in order to maintain strong liquidity and financial flexibility.

This has served RioCan well over 27 years of history. It will continue to position RioCan well to navigate through the ongoing pandemic and provided the ability to invest in accretive initiatives to create value for the long term.

Finally, before I turn the call over to Jonathan for a final wrap up, I would like to conclude with a personal note of appreciation and gratitude. As you know, this is my last quarter conference call at RioCan.

It's been an absolute pleasure working with and knowing many of you over the last five years. This includes my entire team, all of my RioCan colleagues, the RioCan Board of Trustees, our unitholders, the research analysts who cover us and the investment communities that follow us.

I would like to say a special thanks to our Founder, CEO and industry icon, Mr. Ed Sonshine.

It's been an immense privilege to have worked alongside him over these years. As he takes on his new role as RioCan's Board Chairman, he has left RioCan in great hand under Jonathan's leadership.

I wish Jonathan and the entire RioCan team all the best in the years to come. With that, I'd like to turn the call over to Jonathan for his closing remarks.

Well, thanks Qi and thank you for your significant contributions over the last five years. Firstly, I want to thank you and express my appreciation for all that you've done for RioCan, which has been so significant.

On behalf of the entire organization and our Board of Trustees, I wish you the very best in your next step. And thanks also for ensuring a seamless transition, as we complete the search for a permanent CFO.

We are progressing well in our search and we anticipate announcing a permanent successor by the third quarter of 2021. I'm pleased to announce that Franca Smith, Current Vice President, Finance at RioCan will serve as interim CFO, effective May 12.

Franca has been with RioCan since 2017 and brings over 25 years of finance and accounting expertise. She is a respected leader with exceptional knowledge of the trust and our industry.

Franca has a proven track record and we have total confidence in her ability to lead our exceptionally strong finance team and to support RioCan's value creation initiatives. And now, I'll wrap this up before we turn the call over to you for questions.

I want to emphasize, how proud I am of how we've navigated this challenging time. This past year has highlighted the strength of our foundation, our resiliency and our incredible talent.

Now, as a internal optimist, I look ahead, confident that consumer trends are going to continue to shift favorably, when well located, inherently value rich assets and a compelling growth strategy are in the hands of a responsible, innovative and entrepreneurial team like RioCan, they will thrive. It's a privilege to lead this incredible team and to have this well positioned portfolio to create value for you, our unit holders.

Thank you. And now, we're happy to respond to any of your questions.

So Don, over to you to open it up for questions.

Thanks and good morning everyone. It appears that in the first quarter and heading into the second quarter, asset sales are accelerating.

Some of it is development assets. Can you just give a little more color on, what you're selling?

And more significantly, does this give any evidence of pricing for stabilized assets that you could talk to the values?

Sure. So we're selling actually a wide range of assets.

I mean, there are some that are development lands. There are some that are income-producing retail assets.

There's some -- as we announced earlier, like ePlace and eCentral that are mixed use. It really ranges.

And some of them are in primary markets. Some are similar to the ones we sold a couple of years ago in secondary markets.

And I think, what we're seeing is a reflection of the value of retail assets and mixed-use assets, but primarily retail assets, which I think for the last year have seen a bit of a slowdown, just because people weren't certain about what the lending environment was. And I think people were trying to figure out, where retail fit into the overall landscape.

But I think it now serves as a very interesting value proposition for a lot of investors, be they syndicators, be they small pension funds, be the institutional or even high net worth individuals, who really like the prospects of retail assets. So, we're seeing a number of different types of buyers on a number of different types of assets.

So, given the number of transactions we have in the offer, it's very hard mark to pinpoint one specific type of asset or archetype of assets that could answer your question it's a really wide ranging.

Is there any way to draw any conclusions on any change in value coming out of this as compared to perhaps a year ago or 1.5 years ago?

Well, I think there was a lot of uncertainty around where values were over the last year during the pandemic because there certainly weren't a lot of trades, and I think people were scrambling to figure out exactly what the appropriate benchmark is for valuing retail assets. And what we're tending to see quite honestly is a reversion back to values that were pre-pandemic.

And that -- I mean, I'm not talking about enclosed malls those are a bit tougher to value at this point. But certainly for open air centers and for land and mixed use properties, we're seeing reversions back to pre-pandemic.

And in some cases I'll be honest we've been quite pleasantly surprised that values are in excess of where they were certain well-positioned assets that have some development potential.

Okay, great. Thanks.

Maybe just on more. In regards to G&A or some bad debt provisions.

Are there any more one-time costs or COVID-related costs we should expect in Q2, or that you know of this year?

Chi, I can hand that over to you.

Sure. Mark certainly bad debt.

Q2 will -- realistically we will still have some. We're hoping to be lower depending on closures, but you saw the great rent collection results, which are fairly indicated.

G&A as we mentioned, we -- this quarter in Q1, we do have that $5.8 million special one-time, which are certainly not expected to compete next quarter or in the future quarters.

Yeah. But we have definitely -- I mean, it's hard to tell right now exactly what, kind of, provision we would need to take.

But I've got to think that particularly looking ahead, it's what we hope to be a reopening fairly soon that the bad debt provision will continue to dissipate over the course of the year as she said.

Great. Thanks so much.

No problem. Have a good day.

Hi Dean.

Hi. I guess, Hello Jonathan, and goodbye Chi.

Still here for this call.

We already miss you. I actually did have very similar questions to Mark.

I'll call that great minds think alike. When you look at those dispositions and what you've completed so far at the low-four, I mean that's 125 basis points inside your IFRS cap rate, some 200 basis points inside of where the market is, is kind of pricing the units.

How much of that do you think was location specific and how much of that is perhaps the market is overestimating what cap rates on these transactions ought to be? And where would that look like maybe six months ago?

Do you have a sense of that?

Sure. I mean, I think some of these are very well-positioned assets that the very low cap rates are driven by their unique attributes.

One of the assets again is a young and easy. And I mean it's part of multi-res.

So that was, obviously, a very low cap rate. But the other stuff that we're selling, again, I think it is really a reflection of the view on retail, which is a lot better than perhaps the public markets are demonstrating their view on the values of these assets.

I think if anything the last 14 months have demonstrated that these open-air centers are exceptionally resilient. I mean, our rent collection if you look at it just in our open-air centers we're looking at our strong and stable tenants, which makes up a large part of our portfolio, they’re doing very well and they've done very well in the last -- in what is arguably the worst landscape that we've seen in many decades.

And I think when you take that and you compare it to the values of competing asset classes like multi-res or industrial, retail tends to be -- it is overlooked. And I think it's now -- there's a recognition that it's a very good place to place money.

So we are seeing a flow back into the sector, which is great for us. And I mean the list of assets that we're selling does not even come posting to reflecting the demand that we're getting just on inbounds from people wanting to buy assets from us.

There's only so much we're willing to sell. So I think there has been a fair bit of attention turned back to retail.

And I think that augurs well for us and our peers who own these very well-positioned properties.

I think that makes total sense. And I'm assuming a lot of that is -- there's been an abundance of private equity raised and bidding on two cap residential doesn't make sense for them.

Would that suggest that perhaps you could turn into a bit more of a capital recycler if those prices are right? Or are you comfortable with the disposition program as it sits?

Well, the good news about RioCan is we've got options. If we wanted to recycle capital in a more aggressive fashion, we certainly could, but it really depends on what we can use that capital for.

We're in a good position, where we have more retained earnings based on our distribution reduction from last year. We're reducing our development spend a little bit next year.

And our operations, again, our team is doing such a great job of both reducing expenses across our sites, but also Jeff and his team have done a remarkable job enhancing rents across our sites, so we might not be in a position where we need to raise tremendous amounts of capital going forward. It all depends on what we can use it for.

And if there's an accretive way to use that money then, yeah, we can turn on the spigot at any time in a market like this and recycle more assets. From a qualitative perspective though, I will add.

And I think it's important to note, that we will continue to prune our portfolio and make it better but by subtraction. We still have some assets that from a same-property NOI perspective drag us down a little bit.

And if the opportunity arises we will certainly look to sell those assets and ultimately have a better portfolio for it. And then from the development side, we've got a lot of very strong assets that serve as very good retail assets, but also have a tremendous amount of upside from a development perspective.

And as we've stated clearly before, it's our intention to bring in capital partners on those types of assets, fairly early on to both, validate the value of the air rights, but also to mitigate our risk in the development and to get some fees from that investor to ultimately help give value to our platform. So there's definitely, -- I mean, we feel very good about the values out there.

And we think that they are generally understated or underappreciated by the capital markets.

Great. That’s my two.

I will hand it back for some of the others. Thanks again.

Thanks, Dean.

Hi Sam.

Hey, Jonathan congrats on your new call as, CEO, and Qi, we've already spoken. But again wish you all the best in your next step.

Just wanted to start off on I guess your outlook for the remainder of the year in terms of same-property NOI. I believe you mentioned that same-property I would be positive, which I think no one would be surprised, but if you exclude bad debt expense what would be your view on same-property NOI growth for perhaps the second quarter?

Yeah. We're not really giving guidance on SP NOI for the second quarter at this point Sam.

I mean what I can say is that, our outlook is favorable. I mean remember too that we're lapping Q2 2020, which was not our finest moment, given it was the outset of the pandemic.

So I can tell you that, I'll generally say it should be definitely a favorable conclusion of the year for us from many -- from the standpoint of many metrics including SP NOI. But we're not really giving guidance at this point.

It's to exactly where it should trend. But we do believe we were confident Sam that it will trend in the right direction and continue to trend in the right direction.

Okay. That's helpful.

And then on the disposition program, which it's great to see it ramping up and renewed interest in retail properties. I just want to clarify the comment that I think you made in your opening remarks, that the average cap rate was 5.15%, and that's on the full $543 million of activity year-to-date.

No.

… Including land?

No, that's not including land. It's actually if you include land it's much lower than that.

Perfect.

That's only for the income-producing component Sam. So again, we did much better because a lot of the land that we sold has no income as you can imagine.

So the combined cap rate would be somewhere – Andrew, I'm not sure if we have it but somewhere lower in the 4s around 4.

Low 4s.

Yeah, 4.

Yeah, that makes sense. That makes sense.

And all these values in line with your IFRS? Was there -- was the IFRS mark in the quarter due to some pricing that's been firmed up on some of these deals?

A little bit, yeah. But sometimes we have been pleasantly surprised by certain transactions where they are in fact better than our IFRS cap rates.

But generally speaking they're in line.

Okay. Last question for me is just on the goal of setting your debt structure at 70-30 unsecured secured.

What is the reason for that? And the time line that you expect to achieve that?

Sure. I'll start with the timeline.

I mean, as you can imagine, Sam will take quite some time. It's not one of those things you could turn on or off immediately.

So it's probably a couple of years, before we can come close to that objective. And the reason for it is we just think it's prudent capital management in this environment.

It gives us a lot more flexibility and I think it also helps with our debt metrics and our debt ratings at the end of the day. We will still – we intend to very much favor CMHC financing on our mixed use properties.

So we will continue to focus on getting our secured financing bucket filled by those types of transactions. And of course, we own a lot of some properties with partners, where we'll let them govern our secured financing strategy there.

But otherwise, where we can we're going to focus more on the unsecured market for a little while.

Thank you. I’ll turn it back

All right. Thanks, Sam.

Okay. Thank you.

Hi, Tal.

Hey, how is it going?

Fantastic. How are you?

I am doing okay. I want to talk about well, if we could.

The remaining resi towers that you guys don't own, like when will all of those finish?

So, Andrew – I'll hand over to Andrew Duncan, Tal who can give you some more color on that.

Hi, Tal, thanks for the question. I guess, I'll answer your question in two phases.

We're going – we anticipate closing all the remaining air rights on those transactions this year. We've closed three of them already.

There's another three right deals to close. And then in terms of occupancy, there are all those buildings from a condo perspective and a rental perspective are occupying in the later half of 2022, out to the beginning of 2024.

Because you can imagine they're all different heights and they're all kind of occupying in different phases.

Okay. And I guess what I'm wondering is, if you're still going to be very much under construction for the next several years there over the next few years there.

How should we think about how that will impact like leasing the retail portion? Like do you expect that we should expect to see that the other commercial parts kind of grow as those buildings are finished?

Or do you think that actually what we will start taking occupancy very only there.

It's a finely tuned process, where we are focusing on ensuring that there is little disruption as possible. I'm going to hand it over to Jeff Ross talk about some of the discussions he's had with the retail tenants and why we've mitigated any real material concerns about the phasing.

Jeff?

Thanks very much, Jonathan. So we've been very quietly but actively working on the well for a number of years as everybody knows.

What they probably haven't seen is that we're probably in the neighborhood of about 40% leased on the retail leasing side of things. And with negotiations we have going on now, that's going to substantially grow through the second part of this year.

There is a bit of a slowdown. There's no question because some of the Americans that we were talking to really need to lay eyes on the actual development and get feet on the ground.

We feel that we've got a good chance of that happening in third and fourth quarter of this year as the US starts to dilution up a little bit as soon as the border becomes a little bit more porous, they will get up here. But we're actively negotiating deals conditional on the coming up and actually seeing what we're producing.

But from what we have in the hopper now, I'm pretty confident that as we kind of break out of 2021 and in 2022, we will have a substantial amount of the retail done by the middle of next year. And as Jonathan said, it is a finely tuned dance that we're doing because as we get closer to this thing turn it over we're getting really strong interest.

And that's what we're really going to start to generate a higher revenue from the smaller retail units that we have. So we're pretty confident that we're heading in the right direction.

And I think just to conclude that Tal, the completion of the buildings, again Andrew and the development team have done a very good job of ensuring that we put in process ways to internalize all of the construction of the remaining residential building. So the only thing that we'll be remaining at the time there's an opening of the retail sort of at the end of 2022 is the odd hoist that will be on the outside of buildings that will really be out of the way of the retail.

So we feel very confident that when we set our sights on opening dates that we promised to retail tenants, they will have very little obstruction in their way to operate their businesses accordingly. And we've staged it a core, we staged it such that those things were to rise.

Okay. And then I guess my next question is just – it's sort of the same question for the occupancy.

You guys have noted that you've been 85% pre-leased on the office side. What's your stabilized occupancy for that building?

And how quickly are you thinking you might get there?

Yeah. It's a better question for Michael and the team at Allied.

But we're confident with -- I mean they have been extremely active even in the face of a bit of a challenging office environment. They're still doing deals impact just did one last month, which was again a strong deal.

In terms of putting a specific time line on it, I would say that by the time we open or the project opens in the latter stages of 2022, we fully anticipate being stabilized. Would it stabilize mean there?

I mean I would say around 97% or 98%.

Okay. And then just lastly on the retail side, collection rates have sort of been in this -- across the industry, at least the publicly traded guys have sort of been in the sort of low mid 90% range.

Can you hazard a guess about when you expect those to start to improve?

Yeah. I really think that the linchpin to all of this will be the reopening.

And we've done a lot of a lot of research on what's happening in the US which is a good -- I mean I think a pretty good litmus test right now. And what we're hearing from our landlord peers as well as retailers down there is that things by and large, particularly in those areas that have been open for a little while return to normal rent collection numbers have improved significantly and I think we'll follow that trend.

But it really does depend on the vaccination rollout. My sense is that by the summer and then certainly by the early fall, you're going to see consumer activity return to a very active pace in fact higher than pre-pandemic phases, which will put our tenants in good stead.

And what's nice is I mean, it depends on if you're a taxpayer. But what's nice is that the government is bridging the gap for a lot of our tenants that are forced to close by the extension of the service program to the end of September.

So by the end of that, by the conclusion of that program, I believe that we will be in a stage where rent collections will be far more normalized. Will we be at our historic norms of 99.5% rent collection each month probably not by then, but we're confident that as we roll into 2022, we'll start getting back to those heightened numbers again.

Okay. That's great.

Very helpful. Thank you.

No problem. Have a good day.

Hey, Pammi.

Hi. Thanks, good morning.

Nice to see the activity pick up in terms of leasing, particularly on the spreads or specifically the new leasing spreads. But based on maybe what's in the pipeline and hopefully for reopening later this year, can you maybe just talk about your occupancy outlook?

And then secondly, I am just curious how perhaps leasing costs and the retail net effective rents have been trending relative to pre-COVID?

Yeah I'm going to hand that over to John Ballantyne, our Head of Asset Management just to give you some more color on that.

Yeah. I think Paul based on the activity we're seeing now and the pipeline that Jeff's got going, we do expect our occupancy to get up to our more historical norms by I would say mid next year.

What I would say though is we do have a bit more inventory right now in lease. And we're not just trying to fill it up with any tenants.

We're obviously trying to do so with tenants that have been resilient throughout the pandemic. And I think the essential based tenants are the ones we're really doing business with right now and we're going to continue to do so.

So again, we will take our time a little bit more. We're putting more money into our shopping centers.

To ensure that not only are we filling space, but we're filling it properly.

And I think you also asked about the net effect of rents and how much capital we're putting in. And Jeff, I don't know if there's a trend to have to heighten our TIs at this point.

I think on trend, we're probably a little bit higher than normal, but I don't know what you're thoughts are.

Yeah. Just a very little bit.

But what we're really doing is we're doubling down on our qualifying the tenants that we're putting those additional capital out to, so we're more stringent than ever before on understanding where this TI is going. But we're not seeing a massive jump in it.

There is some structure around some free rent and perhaps doing it that way. But the other thing, we're really ensuring is the tenants wherever possible are putting their own capital in as well.

So they're representative they've got skin in the game. So the answer is yes, it may be going up a little bit but not a lot.

And just on the -- like on the renewals have you been -- or even I guess on some of the new leasing have you been maybe as far as the year one increase maybe getting a little bit of a obviously a lesser or a bit of a break on the – relative to market let's say, but then maybe trying to incorporate whether it's annual or more periodic escalations in the term of the lease?

Yeah. We're – it's been a theme that, we've been focused on even before the pandemic, but certainly now we put a lot of pressure on our leasing department and they've responded quite well.

On not only getting five-year bumps, but actually annual bumps. And even though, it's been a tricky environment, they've come through quite well.

So we're all about growth for the future. We are really trying to embed that in our philosophies when we do any sort of activity, but most importantly leasing, to ensure that that growth is consistent and sustainable.

And so Jeff and his team have done a good job of working those in. And of course, you can't do that in every lease.

And certainly, some of our renewals are fixed. So there's only so much flexibility you have.

Wherever the opportunity arises, we will – again, we like to hold our net rents in year one, but in some cases, we'll give a little bit on the first year, if we can get sustained growth going forward.

Got it. Maybe just switching gears to the Well and the office I guess completion later this year.

And just maybe, if you could just clarify, how the cash NOI impact will flow, I guess, on the initial phase of the completion, later this year and then into 2022? Is there some maybe color you can provide on that specific project?

I'm not sure, Qi, if we've disclosed exactly what the flow of funds is from the well. But I think, it's really, again, it sort of logically follows the tenancy possession.

So, I mean, I think the office will start kicking off some fairly sizable NOI by the end of this year. And then the retailers will follow by the end of 2022.

And then of course, the residential, we own our – yes, we now have 50% of the largest residential building there that has around 600 units. That is going to be income-producing probably at the beginning of 2023, so I can't give you specifics, Pammi, but those are generally the touch point that you would follow in order to determine what kind of NOI activity will happen from that site.

Got it. Maybe just one last one.

And maybe Jonathan, going back to your comments around FFO growth picking up, I guess, over the next few quarters. Any comments as to how you think the full year FFO may shape up?

Not giving guidance Pammi at this point. Again we're very – I can give you the overarching statement that we're very confident that FFO will continue to improve, particularly as a result of this pandemic dissipating.

And we do feel very confident that that is something that will help us dramatically. We've also got developments that will be completed as the year goes on that, will also add to our FFO.

So again, there will be growth. But in terms of giving you guidance on what that ultimate number will be.

We're not offering that at this point Pammi, but we're confident in the ability to constantly grow it.

Great. Thanks very much.

I’ll turn it back.

Thanks, Pammi.

Hi, Jenny.

Hi. Good morning, and congrats to you Jonathan and also to Qi for the next step in your career.

Just with respect to the G&A, I wanted to confirm that any costs related to the changes at the C-suite were incurred in Q1 2021. So Q2 should be a cleaner quarter for G&A as far as you know right now?

Confirmed.

Okay. Great.

And is Q4 sort of a good run rate to look to in terms of a normalized quarter on G&A? I'm recognizing that's been a little bit bumpy, when you look past over the last few quarters.

Jenny, if I may answer that. Q4 you still have to add back some of the nuance.

That means, because last year because of COVID, we actually lowered the bonus accrual for example, through all the entire organization. So this year, even though still under pandemic, we certainly think I hope it's better.

And of course, the budget already reflect to quite an extent the pandemic effect. So it's not fully.

So it's the best way to probably use Q1, what we just reported, and remove the onetime as we talked about as a run rate.

Okay. Okay.

Great. That's helpful.

Going back to the dispositions. In the MD&A you talk about an enhanced disposition target.

I didn't see a specific number, but I'm wondering if that commentary reflects what we have -- what we know to date as far as what you've sold and contracted? Or is there sort of a bigger target for the full year?

Like how should we think about dispositions for the second half of 2021?

So, what we've disclosed is what we currently have in the hopper. There are other transactions that are being contemplated.

But of course, it's an unpredictable market. You never know what will close and what will go firm.

But I will tell you that there will be growth in that number. Assuming all works out and the current deals do close then there will be growth above what we've disclosed.

Will it be material growth? I wouldn't say, so but there will be some other activity in the latter part of this year.

Okay. So it's fair to say that, it's front-end weighted then on dispositions, right?

Yes.

Okay. Great.

And Jonathan you talked about places to reinvest that capital and possibly taking advantage of strong pricing in the market. I'm just wondering notwithstanding that the stock is up 25% year-to-date.

Is there a contemplation that unit buybacks make sense from a capital allocation perspective?

One of our options for sure Jenny. I mean, right now we are focused on making our balance sheet strong as strong as possible.

And so our initial focus is going to be to pay down the debt a little bit and we obviously have a development pipeline that adds huge amounts of value going forward. So we'll fund that.

But looking at everything and balancing it all out, the NCIB is still at this we think very undervalued stock price a very accretive and very prudent thing to do. But again, we're going to wait and see how the other metrics fall out after we get the proceeds from these sales and then we'll make that determination, but it is a possibility.

Okay. Great.

With respect to the rent collection a pretty strong number considering a fifth of your tenants are closed right now. Do you have a sense of how many of your tenants are eligible for serve?

What's kind of closing that gap between your closed tenants and their ability to pay rent?

Yes. And I'll also remind you it's pretty good in the sense that the 80% that are open a lot of them are open with restrictions to and severe limitations on what they can sell.

So again in the face of this environment we're pretty pleased with it. But I'm going to turn it over to Oliver Harrison just to address the question on rent collection and who makes up the service categories.

Yes. Well, primarily the Sears program is targeted for Mark and the tenant base.

And I would say just based on anecdotal conversations with the tenants. And then the resulting rent collection statistics for those category tenants.

A broad base of that group is utilizing the program. And the program is actually, I would say, officially flowing through to them and then to us.

It is the one thing, I'd say, it makes it a bit challenging is the fact that it is sort of done in arrears. So there has been a bit of a lag effect.

We're seeing rent collections coming in from these tenants, let's say, in April that relate to Q4 2020. But the program is working for them, but we do not have any specific is.

So it's not something that you're formally tracking or have agreements with tenants in place in terms of getting that serve money flow through demand payment is that fair to say?

Well, we have agreements with leases. And so we fully anticipate getting not only the Sears payments, but 100% of their rents.

And we are keeping close paths on all those tenants that we know to be Sears eligible and we've got an ambassador program that allows them to get our assistance to help them with the somewhat confusing process. But we just don't have I think specific statistics at our disposal right now, but there is -- we definitely know which tenants are eligible for Sears and which ones are eligible for other government assistant programs.

But thankfully, it's a fairly broad umbrella of tenants not just the independents, there's also smaller franchisee tenants that benefit from it as well.

Yes. We also know that their legal requirement is to provide the landlord with the money that they are collecting through service program.

Otherwise, the CRA will come after them and no one wants that.

That's right. And then finally on construction costs, we're seeing inflation across the board and sort of a lack of availability of suppliers in trade.

Are you starting to see that in the development projects? And are you rethinking your development yields or sort of how you underwrite developments going forward?

Yes. I'm going to turn that over to Andrew on the specifics around elevated construction costs and then I can certainly hit on the -- what it's doing to our outlook on future projects.

Jenny, thanks for your question. I think I'll answer in a couple of ways.

One, we're in a fortunate right now in our development pipeline where the majority of our projects are 100% tendered and contracted. So we're seeing it in a market and we're seeing it through suppliers in those projects, but not per se to the buy.

We've got some projects we're looking at kicking off sometime in '22 and we're actively pricing those projects right now and trying to appropriately mitigate the risk by adding contingency on the escalation side, but we're not specifically exposed at this moment. Are we seeing it generally in the market?

Yes, there's a lot of construction starts. There's a lot of material increases.

But we're adequately pricing those risks into our estimates at the time.

And as for the second part of the question Jenny, what I'll say is that RioCan is uniquely positioned. We've got a lot of assets that service development prospects that are income producing.

And so we can make the decision or render the conclusion, basically right up until the day we start demolition as to whether or not it's viable. So if we sense that the market for rental is just not where it needs to be and costs have elevated to a point where it's just not a viable project.

We can pull the plug on it and still have a very valuable and very active income-producing retail asset. Now that's for the most part, we do have some Greenfield properties.

But the typical RioCan development site is one that is quite productive as it, so we always track these things. And Andrew and his team do a really good job of keeping the finger on the pulse of it.

And that gives us the ability to make split second decisions on whether or not to start or not on some of these projects.

Okay. Great.

That’s all for me. Thank you very much.

Great. Have a good day, Jenny.

Hi, Howard.

Hi, there. I just wanted to turn back to renewals and talk about the retention rate.

I see in the comment in the MD&A, you pointed out that the lower retention rate was really due to one tenant that had a lot of space, but had a -- it was -- they were came lower than market rate. Is that fair to say that they were -- one of those potentially vulnerable tenants like maybe a department store?

No. Actually, it was a very strong tenant.

Did we disclose some of this?

Didn’t see which one.

But it's a very well covenanted tenant that just -- again they had saturated the market and felt that it was a store that wasn't logical for them. But -- and it was actually an old zellers lease that turned into a -- it was bought by another party.

They opened and then they just -- the store wasn't viable for them. But the good news there, Howard, is that we've already managed to backfill the majority of that space at higher rents.

So while it did impact our retention numbers for this year, it will actually contribute to our growth going forward. And so I think it's wise to look at our normal course retention, which is close to the 85% range rather than this which we feel is anomalous, but ultimately net-net this is a win story for us.

We're going to do far better with that space. Like I said in the hands of someone like RioCan, we can do more with space than perhaps others.

Great. Right, that makes sense.

You should get that lift with the new tenant. I guess when you think about the tenants that aren't renewing kind of that 15% I guess normalized 15-ish percent, are they more so especially in the past few quarters have they been really in the potential vulnerable bucket for the most part?

Or are they kind of a mix of all kinds of tenants?

I'm going to turn that over to John Ballantyne.

Yes. I think that's a pretty good classification.

We always have typical turnover at RioCan. And sometimes it's wanted and sometimes it's unwanted.

To the extent, we can still refine our tenant mix, we will negotiate some tenants out. So yes, we did lose some vulnerable tenants on the way through.

But we also are clearing some space to put into tenants that will be more beneficial for those centers over the long-term.

Okay. Yes, that's helpful.

And do you see I guess part of those vulnerable tenants, they should benefit as hopefully as we reopen. So can we expect maybe a higher retention rates from those classic tenants going forward?

Or is that what you're seeing already now?

I mean, the broadness of that category suggests that we're going to see different stories on so many different levels. I mean some of those potentially vulnerable tenants are actually very viable tenants that we want to maintain in our portfolio.

A lot of them are restaurants that make up a key part of a downtown mixed-use development and even though they're suffering now we want them to renew. We want them to be there.

Some of them are moving theaters and gyms that might not have the ability to renew, it's hard to give you a consistent answer in that regard. We will -- there are certain categories that make up part of that potentially vulnerable like, let's say, fashion where we do believe that the renewals there will start to get lower and lower and lower, but that's by design.

That's by choice from RioCan. We do -- we have a -- we're making a market effort to get our exposure on apparel tenants down to sort of somewhere around 5% or lower.

So unless they can meet that we really want on renewals, we're just telling them that they can seek other premises. So it's hard to give you a consistent answer across that entire category Howard.

No, no, no, I get that's still pretty good color. Just one more on renewals for me.

I guess, can you remind us again of how those fixed renewals for the leasing spreads how they're priced out or how it determined?

On -- sorry, on fixed renewals, they're contractual. So they're already baked into a lease and we know about them well in advance and budget for them.

And obviously, when they're not fixed it's a negotiation. And it really -- we've been very fortunate in being able to achieve rents and spreads that are higher than our existing market rent -- sorry, embedded rents.

We think that that mark-to-market not only on our renewals, but on our -- on any vacant space is a significant upside provider for RioCan and we're proving that out quarter-over-quarter now with some healthy leasing spreads.

Okay, right. I see.

So the fixed renewals is like it's an actual number. It's a -- that's already in the release.

It's not based on some I don't know CPI or some other benchmark?

Well, there are some renewal clauses in leases that will say it's going to be x-plus CPI, but the consistencies throughout all fixed renewals is there's a number that is set. You're right the only variable could be in some cases CPI, but that's very limited.

Usually, it's just a set number that has been pre-negotiated.

Okay. Okay.

No that makes sense. I just want to turn to disposition.

It's pretty good cap rates overall. I guess, there was one property, I think, it was a partial disposition that was in the teens for the cap rate, but that I guess that's one of those properties you talked about earlier Jonathan in that was maybe dragging down the same-property growth and you're looking to dispose of?

Yes, I think that's accurate. I'm not sure specifically which property you're referring to, but there are like I said, before there are qualitative aspects.

Yes, yes, that's right. So we have made some decisions on assets where we're selling them at higher cap rates.

It's not -- it might not be specifically in line with our IFRS values. But on balance it's the right thing to do for the future of the organization, because we see a future that has that has some troubling elements to it and it will impact same-property NOI going forward and take up a significant amount of capital in certain cases and human capital as well.

So in those cases we elect to sell them as we did at the Riocan Tanger site in Quebec. It's not the greatest cap rate, but from a qualitative perspective, it will help us going forward.

Right. Great.

And for those secondary assets you're still -- you still have in the pipeline maybe those that have CapEx in that range. Are those -- do you have -- do you find that lately you've had to market them heavily?

Or are they -- are you getting approached actually by I don't know private buyers or other people looking for maybe higher cap rates?

That's a great question. The interesting thing was that once we reached our target of 90% major market focus we, sort of, turned the tap-off a little bit on our aggressive disposition program in secondary markets.

So what you're seeing in our list of dispositions that do constitute secondary market sales, a lot of those have been off-market approaches. We have not been actively marketing a lot of these assets.

There is the rare exception. But for the most part these are just approaches from local individuals, private individuals and they're very enticing and we'll follow through on the deal that they are.

So it is actually more of a passive approach we've taken on some of those assets.

That's very interesting. And just last one for me maybe on debt-to-EBITDA.

Can you just or I guess more dispositions out of the $540 million you've disposed, can you just talk about roughly how much you expect to see going down to paying down debt? And maybe how much for developments?

I think most of those actually target to pay down the debt depending on the end how much we're closing. Yes.

So that's the primary priority.

Yes. So the majority I'm not -- we can't give you a specific number.

But again our focus right now is making sure our balance sheet is improved to the point that when we can turn to, sort of, more of an offensive posture. Our balance sheet is in great shape to make that turn.

Right. That makes a lot of sense.

Thanks for taking my questions. And congrats again, Jonathan and Qi.

Thanks so much, Howard. Always a pleasure.

Thank you.

All right. Well, thank you Don and thank you, everyone who is still on the line.

I also have to remind everyone that our AGM is set for May 26 and we're very much looking forward to it even though it will yet again be virtual. Unfortunately, I will not have my opportunity to shine in a live setting.

But hopefully it will be just as impactful. Anyways, thank you everyone for tuning in and thank you for your ongoing support and we look forward to speaking to you again in May and then again in the second quarter.