cibc analyst neutral with target $10.25 CABack To Business, Strategic Initiatives Take A Breather Our Conclusion With rent collection statistics capturing the lion’s share of attention over the past few weeks, we believe that investors will view the REIT’s progress on this front in a favourable light (and note that May collections appear to be shaping up even better than April, as per management comments). As we look forward, we believe that AX is well positioned to navigate the current pandemic, and would suggest that the REIT’s relatively lower exposure to retail (as compared to other diversified REITs) serves to mitigate the overall impact to the company’s cash flows over the near term. The recent termination of the strategic review, citing global uncertainty, is a prudent measure as we believe a more meaningful corporate action may prove to be difficult given current conditions, although the company did leave the door open to considering strategic opportunities in the future. Our 2020 and 2021 estimates decline by ~7%. We apply a 15% discount to our revised $12 NAV (on a 25bp increase in our applied cap rate to 6.75%) to arrive at our new price target of $10.25 (from $12.50). Key Points Earnings Results: Q1/20 FFO was $0.33/unit, a slight decline from $0.34/unit a year ago and below our estimate of $0.35/unit. The variance to our estimate can be explained away by the sequential decline in occupancy and by the timing and magnitude of asset sales(which were marginally off from our expectations). COVID-19 Update: The REIT has collected ~93.2% of April rent, substantially more than many of its peers. In addition, AX is offering a deferral program to support tenants in need of assistance, with $2.2MM offered under the program thus far for April. Debt And Liquidity Position: As at Q1/20, the REIT had a D/GBV of 52.6%, as compared to 52.3% at Q4/19. Debt maturities in 2020 amount to ~$375MM. We note that the REIT entered into a new unsecured nonrevolving term credit facility agreement in early February (admittedly before concerns over the pandemic accelerated), and withdrew the full balance ($200MM) to repay its Series B unsecured debenture, which also matured in February. The REIT had $191MM of liquidity at Q1/20 (as measured by undrawn facilities + current cash). For context, this represents ~0.5x the 2020 debt maturities noted above, and ~4 months of stabilized revenue (conservatively utilizing 2019 revenue as our run rate, unadjusted for recent dispositions). Interest coverage of 3.08x remains healthy, suggesting that there is little to no need to draw on available liquidity to cover interest payments at this time.Valuation: At current prices, the REIT trades at 6.3x 2021 FFO, representing a 32% discount to our $12 NAV, and yields 7%.