\u201cThe miss is largely as a result of an absence of gain revenues once again in the quarter and an increase in interest expense. Last quarter management had indicated that the $9-million to $10-million of expected gain revenues would decline to $7-million and be pushed into Q4 and Q1 2010. This has not materialized,\u201d said Ms. Kirk. \u201cIf gain income does not recover, distributions are expected to remain above AFFO.\u201d<\/p>\n
The big question then becomes will RioCan be forced to cut its distribution, something chief executive Ed Sonshine said he wouldn\u2019t do at the company\u2019s annual general meeting last year.<\/p>\n
\u201cWill the distribution be cut?,\u201d said Ms. Kirk. \u201cWe do not expect so given that the shortfall is small when taken in the context of the overall value of the REIT\u2019s portfolio and in particularly if you back out the reinvestment of distributions. Adding additional leverage to make up the shortfall would barely turn the dial in terms of RioCan\u2019s debt to gross book value.\u201d
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