We have officially reached the half way point in a year that feels much longer than six months in the making. Along the way, we learned much about the composition of our portfolio. Lower leverage (average 50% loan to portfolio value), ample capital in reserve and strong in place tenant relationships allowed us to take swift and constructive action as we entered the COVID influenced environment. As a result, our collections and occupancy are, in most cases, materially better than expected. By way of example, our residential portfolio averaged 92.39%  occupancy and 98.92% collections over the quarter. Our two recent retail acquisitions (Bonita Point and San Marcos Village) averaged 94.22% occupancy and 93.23% collections. Across our portfolio, we devised hundreds of individualized tenant plans to ensure current rent payment but also the long-term sustainability of each business and/or resident. Through this process, we agreed to partially abate base rent in only one case (with a national retailer) in trade for relinquishing an option to terminate their lease in the near future. A win-win in the current context. 
But the market continues to evolve – one step forward, one step back at times. We remain concerned about a “shut down” economy, an increasing number of bankruptcies, continued domestic unrest, the impact of an expiration of government stimulus and the viability of long closed tenants post-COVID. The Pacific Northwest (namely Portland and Seattle) market, for example, continues to make headlines. The protests and recent legislative activity have materially impacted tenant demand, rent growth and collections for both residential and commercial properties. We continue to monitor each market, asset and tenant closely. Proceed with caution is the mantra. Our continued approach is extremely hands on and both art and science. Operational decisions are data driven but coupled with an entrepreneurial, positive and collaborative mindset. I share some of our recent internal team communications below. 
With change comes opportunity. We are seeing prospects to create value with new acquisitions, dispositions, financings and thoughtful investment of capital into our existing portfolio. We continue to source off market investments with a current focus on best in class office with credit tenancy and longer dated leases, lower finish industrial (e.g., last mile delivery, warehouse, distribution), suburban residential and opportunistically priced retail. During the quarter, we closed on a trophy office acquisition anchored by Morgan Stanley and Charles Schwab (Ocean Ridge). We also sold a boutique residential community (Sterling) without any price adjustment. Sterling returned almost $5M in total capital and a 13%+ IRR to our partners. In all, we have closed on 7 transactions in the past 18 months. We will continue to be active though highly selective in our future pursuits. 
Although we remain cautious, we have elected to resume distributions (Q1 and Q2 2020) for most assets. Property and investor reports to follow via email and our investor portal later this week.   
The proverbial light at the end of the tunnel may appear more elusive in these times, but we’re committed to the journey, maximizing portfolio performance and the opportunities that await. 
Our core relationships serve as the foundation for our long-term success. Thank you for your continued trust in our team. 

Your partner,
Douglas Arthur and Team SENTRE