COVID-19 and Rent Relief

OTTAWA, March 2020 — “Inspire People to Enhance Communities”. This is Colonnade BridgePort’s purpose statement and it underscores all that we do. It extends to those communities where we own and manage buildings; to the tenants within those buildings; to our clients and to Colonnade BridgePort employees who make us who we are. We are fortunate to be part of these communities and now more than ever, it’s important for us to do our part to enhance them. So how does enhancing communities connect to a conversation about rent relief? I will do my best to give you my perspective as we enter the third week of self-isolation and remote work which also falls on April 1st, the day of the month that rent is due and the first occurrence of this during the COVID-19 pandemic.

As the CEO of our real estate company and a person concerned about our community, I have spent a significant amount of time thinking about how this pandemic will affect our business, our community and our economy. I have come to rely on a simplistic analogy to articulate the co-dependencies and domino effects that could happen because of this crisis. Consider that the economy is a bicycle chain. The stronger the chain, the harder we can push the pedals and the faster we move the bike forward. Now think of the real estate industry as a series of links on that chain. Customers buy products and service from businesses, these businesses are the tenants within the buildings in our community. Tenants use the revenue they generate to pay employees’ wages, their suppliers invoices, rent to their landlord and to generate a profit for stakeholders. Because of COVID-19, many of these tenants have been told to close their doors indefinitely. Stating the obvious, many SME’s, especially those in the retail sector, are under serious financial pressure.

Now let’s take the analogy a step further. Colonnade BridgePort’s business is to manage real estate assets on behalf of our clients. We are the next link in that chain. Our job is to fill buildings with rent-paying tenants while ensuring the safety of its occupants and protecting the integrity of the physical asset. Our employees manage these buildings. We also retain third-party suppliers who employ people to clean the premises, provide landscaping services, and maintain elevators and life safety equipment, for example. We hire lawyers and accountants, and we pay mortgages. As you can see, when our tenants are under threat, so too is our business and the many businesses that we support.

The last link in the economic chain’s real estate section are those people who own the assets. We own some assets ourselves; we have clients that are large asset managers that have portfolios across the country, and conversely we have some small investors that own one building. Regardless of size, these clients own real estate as an investment and that investment is meant to generate a return from the rent we collect. These returns have many uses such as paying mortgages and property taxes and, in many cases, retirees’ pensions. Each investment has a purpose and as such, is another important link in the chain.

So how does all of this connect to rent relief. We, at Colonnade BridgePort, want to help ensure the links of the chain remain strong.

To our tenants, the first link in the chain, the message is simple: We understand these are unprecedented times, the future is uncertain, and you are worried about your business, your employees and your customers. We have spoken to each of our owner clients, encouraging them to support rent relief where possible. To be clear, rent relief is not always possible as they too are facing challenges and uncertainty.

With respect to our clients that own these buildings, we have encouraged and received almost unanimous consent to provide rent relief on a short-term basis. This is going to be a month by month exercise. The relief will be tailored to the situation of the tenant and the building owner. To be clear, those most vulnerable will be addressed as a priority. Those least vulnerable – company’s that are still operating and generating revenue or people still employed, will be given lower priority.

In return, we ask that all tenants do their part to maintain the strength in the chain. Seek relief from government programs. Pay your rent or even part of it if you can. And, be patient. We are working long hours to address requests, manage cash flow and protect the safety and security of the people that work and live in our buildings.

With that said, I would like to give a heartfelt thanks to everyone who makes up our communities: our tenants, owner clients, suppliers and equally important, the Colonnade BridgePort team. The positive energy being generated is more contagious than the virus itself. If we all do our part, I am confident we can keep the links of the chain strong for everyone. It’s imperative for us to collectively pedal the bike through the uncertainty and then into a recovery with some power and speed.

Hugh Gorman, CEO Colonnade BridgePort