Ladies and gentlemen, welcome to Ciena Senior Living, Inc. Q1 2020 Conference Call. Today's call is hosted by Lois Cormack, President and Chief Executive Officer and Nitin Jain, Chief Financial Officer and Chief Investment Officer of Cianna Senior Living, Inc. Please be aware that certain statements or information discussed today are forward looking and actual results could differ materially. The company does not undertake to update any forward looking statement or information.
Please refer to the Forward Looking Information and Risk Factors section in the company's public filings, including its most recent MD and A and AIF for more information. You will also find a more fulsome discussion of the company's results in its MD and A and financial statements for the period, which are posted on SEDAR and can be found on the company's website, siennaliving. Ca. Today's call is being recorded and a replay will be available. Instructions for accessing the call are posted on the company's website and the details are provided in the company's news release.
The company posted slides, which accompany the host's remarks on the company website under Events and Presentations. With that, I will now turn the call over to Ms. Cormack. Please go ahead, Ms. Cormack.
Thank you, Zanotta. Good morning, everyone, and thank you for joining us on our Q1 call this morning. We are hosting this call as we continue to battle the fight against COVID-nineteen. Here in Canada and around the globe, the senior living residences have been at the epicenter of this crisis. Before Nitin and I give you an update on our operating and financial results, I want to provide you with some insight into how we have been managing amidst the crisis.
1st and foremost, I would like to express my deepest gratitude to our team members. At Ciena, our team's demonstration of resilience, compassion and commitment has been nothing short of heroic. I have been humbled by their dedication to residents, to each other and their resolve in fighting COVID-nineteen. They're making a remarkable difference in people's lives each and every day in the midst of this crisis. They are an inspiration to all of us.
We are deeply saddened by the tragic loss of life of residents and of 2 valued team members. I want to express my deepest condolences to their families and to our team members who are grieving while continuing to work and manage an extraordinarily difficult situation as a result of this pandemic. The management of COVID-nineteen and the health and safety of residents and team members is currently our singular focus. Since the onset of the pandemic, we have been collaborating with sector associations, provincial governments, health authorities and health system partners to identify sector needs and help to shape important policies and protocols to manage the situation. We have an internal incident management team, which is directing the prompt and comprehensive implementation of all preventative measures and provincially mandated directives across the company.
Since the start of Q1, we have been proactive and diligent in addressing extensive infection prevention and other precautionary measures aimed at limiting the spread of the virus. To date, we're encouraged that we have no confirmed COVID-nineteen cases in any of our residences in British Columbia. In Ontario, we have 4 locations that are now cleared of outbreak status and a number of residents and team members who previously were COVID positive have now been resolved. We are encouraged to see more cases resolving every day. We also welcome the expanded testing of all residents and team members in Ontario, and we are encouraged that the majority of these test results are now coming back negative.
Despite the many precautions and safeguards, we currently have 13 Ontario long term care homes and 4 Retirement Residences as well as 1 managed home with active cases of COVID-nineteen. Of our 83 owned and managed residences. In some cases, there have been very limited spread of the virus to a very few cases in either resident or staff. Unfortunately, a few of our long term care residences in Ontario have been very severely affected. And this has been extraordinarily challenging for residents, their families and our team members.
We are very thankful for the support from the hospital, the Canadian Armed Forces and local health networks who are providing assistance and expertise. Everyone is working extremely hard with the common goal of fighting COVID-nineteen. Personal protective equipment has been experiencing global supply chain disruption. To ensure that we would have access to PPE, Sienna joined other senior living operators as a founding member of CAPE, which is the Canadian Alliance to Protect and Equip Senior Living. This initiative is designed to ensure that all senior living providers across the country would have access to PPE amid the global supply chain disruption.
Through Kate, Ciena commits to over fund our PPE requirement by 35% to allow for a reserve of supplies that can be made available at cost to small and not for profit Canadian operators. To date, Capes has successfully procured over 20,000,000 pieces of PPE. Sienna has had adequate PPE to date at all of our residences for use in accordance with provincial directives. We have sourced nearly 3,700,000 pieces of PPE to date for Sienna's use, and we're thankful for governments who have prioritized the need in the senior living sector to access PPE. With respect to staffing, the senior living sector was experiencing staffing shortages and challenges prior to the pandemic.
This has been further exacerbated by COVID-nineteen, particularly when a resident has a positive COVID-nineteen case. These staffing shortages occur because team members can no longer move between multiple sites. They are unable to work because they have tested or are suspected COVID-nineteen positive or they may decline work or self isolate for various other reasons. We are doing everything that we possibly can to recruit and to deploy staff and to expedite the hiring process while supporting the single work site. Since the start of this pandemic, we have offered part time workers to go full time and 900 part time personal support workers and nursing staff have selected to work full time with Sienna.
In addition, we have hired many new team members to care for residents. We are thankful for the support of the Registered Nurses Association of Ontario, who have been supplying new staff for us to hire. The temporary pandemic pay for frontline workers by the governments of Ontario and British Columbia is helpful in recognizing the essential and heroic work of our staff and other frontline workers. Inspired by the dedication and extraordinary effort of staff in the senior living sector, earlier this week, we participated in the launch of CARES as a founding member and this initiative is mobilized together with 3 of our sector peers. The Senior Living CARES Fund will provide emergency financial assistance to sector employees who are facing extraordinary circumstances amidst the crisis.
And with this, we will build a legacy for future investment in employee education. The CARES fund aims to provide one time financial grant of up to $10,000 to eligible employees of long term care and retirement operators in Canada. The founding members of the CARES of our Board of Directors has contributed approximately 20% of their annual cash compensation for the remainder of the year. We are grateful for the provincial government support in funding the extraordinary associated with the extensive infection prevention and safeguard measures as well as single worksites for team members, all of which help to limit the spread of the virus. To date, the government of Ontario has announced $243,000,000 in emergency funding for the sector as well as $20,000,000 in funding for the retirement residences, which will fund incremental COVID-nineteen costs.
The government of BC has committed funding for assisted living and long term care to support single worksite locations. This is an extraordinarily difficult time for residents and families who have not been able to visit for many weeks now, and our team members are doing everything they possibly can to keep residents connected to their loved ones, often in very creative ways. Timely and meaningful communication is so important, and we want all of our stakeholders to have the facts. This can be difficult given the rapidly changing circumstances and the increased media attention as well as the intensity of the current reality that requires our team members to focus on providing essential care and services to residents. Providing quality and care sorry, providing quality care and services to our residents is our mission.
We are extremely proud to have recently been awarded a 3 year accreditation by the Commission on Accreditation of Rehab Facilities for the long term care portfolio in Ontario, with a 99.5% conformance to the accreditation standards. This is a reflection of Sienna's innovative programs, best practices and commitment to resident centered care. It is the highest level of accreditation and is a testament to the incredible work that our team is doing every day. Nitin will now provide an update on our operating and financial performance.
Thank you, Lois, and good morning, everyone. Before I discuss our Q1 financial results, I would like to express my gratitude to our incredible team during this very difficult time. Their unwavering commitment to providing the care and services to a resident is truly amazing. Turning to our key operating metrics. Average occupancy in our long term care portfolio remained high at 97.9% in Q1 2020.
Average same property occupancy in the retirement portfolio was 85.1% in the quarter, a decrease of 1% from the Q4 of 2019, largely due to fewer tours and residents moving in, as well as oversupply in the number of our markets. Same property NOI for the quarter was $36,400,000 compared to $38,900,000 in Q1 2019, a decline of 6.4 percent largely as a result of softer occupancy in our Retirement segment. During the quarter, we recorded $900,000 of expenses to support the cost of managing COVID-nineteen and $800,000 of pandemic related government funding revenues. The long term care division generated same property NOI of $20,600,000 compared to $21,000,000 in the prior year, mostly due to timing of expenses. Long term care residences represent 56 percent of Ciena's portfolio, and we will continue to receive full funding for vacancies caused by temporary closure of admissions due to an outbreak, including COVID-nineteen.
As a reminder, government funding for direct care and resident programs in Ontario is used for resident purposes only and operators do not make any income from these. The Retirement division generated same property NOI $15,900,000 compared to $17,900,000 in Q1 2019, largely as a result of lower occupancy due to fewer tours and residents moving in, as well as oversupply in number of our markets. This was partially offset by fewer move outs than usual and some conversions from temporary to permanent stay towards the end of the quarter. At the time, we released our year end results in February. We expected mid single digit decline in retirement same property NOI for the first half of this year.
As a result of COVID-nineteen, we incurred additional costs to manage this and experienced a decline in move in activity. Also in preparation for the hospital surge capacity program, we did not make significant adjustments to staffing in accordance with occupancy. These factors resulted in our same property NOI to decline by 11% in Q1. For the month of April, average same property retirement occupancy was 83.7%. April rent collections from residents remained consistent with previous collection levels.
OFFO in Q1 2020 was $24,400,000 compared to $21,300,000 in the prior year, an increase of 14.5%, largely driven by lower G and A expenses from mark to market adjustments on share based compensation, lower cash taxes and lower net interest expense, partially offset by lower NOI. Q1 2020 OFFO share was $0.365 compared to $0.32 in the prior year. In the quarter, AFFO was $25,600,000 compared to $23,400,000 in the prior year and AFFO per share was $0.382 in Q1 compared to $0.353 in the prior year. Ciena has the financial flexibility and liquidity to help us We have also increased our unencumbered asset pool to approximately $540,000,000 as of March 31, 2020 from $300,000,000 at the end of 2019. Our liquidity was $222,000,000 at the end of the quarter, comprised of cash and cash equivalents and available credit lines.
To preserve liquidity, we are also taking advantage of the deferral programs available to various tax payments, worker compensation premiums and property tax payments, as well as rate reductions in energy costs. As of April 30, 2020, our liquidity increased slightly to 225,000,000 dollars With our diversified debt profile, we believe that we will continue to have access to multiple sources of financing, and we have limited debt repayments and maturity for the remainder of 2020. We also believe that we will be able to successfully refinance our Series B debentures coming due next year based on current financial position. Our debt capitalization is well distributed between unsecured and secured debentures, credit facilities, conventional mortgages and CMHC insured mortgages. Turning to our balance sheet and capital structure.
Our debt to growth book value improved by 90 basis points to 46.9 percent year over year. Ciena's debt to adjusted EBITDA improved to 6.8 times in the quarter compared to 7.1 times in Q1 2019. Our interest coverage ratio remained high at 4.2 times and we decreased our weighted average cost of debt by 20 basis points to 3.6% year over year. These are important indicators in terms of how we manage our debt and our ability to service it. For Q1 2020, Sienna's AFFO payout ratio was 61.3 percent, leaving room in case of a temporary decline in AFFO.
As a result of current volatility in the financial markets, we have suspended our dividend reinvestment plan in order to prevent dilution at current stock price. Dividend payments are paid in cash to all investors until further notice. Given the uncertainty surrounding the impact and duration of COVID-nineteen pandemic, we have withdrawn our guidance for 20 20 fiscal year. We expect that costs relating to managing the pandemic will continue to increase and some of these costs might not be covered based on the current government funding announcements. We will closely monitor our business operations and the impact on our financial results, and we will continue to provide updates on an ongoing basis.
To ensure that we're dedicating all our resources to managing the current prices, we're not considering new expansion projects or acquisitions at this time. We may also limit capital expenditures to essential maintenance capital. Although it is impossible to determine the ultimate impact of COVID-nineteen at this point with our financial profile and balanced portfolio, we are well positioned to navigate the current situation. With that, Lois will provide her closing remarks.
This is Deborah. I'm not showing Lewis' line connected at this time.
Okay. I can keep going with our remarks then. Managing COVID-nineteen is extremely challenging and operationally intensive and will likely remain at the center of media attention and national debate for some time. However, there will be opportunities that emerge as a result of innovation, enhanced relationships with our stakeholders and our ability to adopt new ways of working. We expect these changes will long pass will last long past this crisis.
The extent of the impact of COVID-nineteen on the company's operational and financial performance in the coming quarters will depend on certain developments, including the duration and scope of the pandemic. We expect COVID-nineteen will continue to impact our operations and will require the use of certain precautions for an extended period of time under a new normal until a vaccine is developed and administered. In managing the crisis, while managing the crisis of a priority, we have put our short term growth plans on hold. We do remain optimistic about Ciena's future as a high quality provider of essential services to a rapidly growing demographic, and we look forward to gradually reopening our residences while keeping our residents and team members safe. I'm incredibly grateful for our team who continue to demonstrate commitment, compassion and resilience.
In return, they have received an outpouring of support and appreciation from residents, families and each community we serve. We want to acknowledge the many partners that are supporting us in the fight against COVID-nineteen and the swift leadership, including the Registered Nurses Association of Ontario, all public health units and regional Ontario health teams, the Canadian military, local health integration networks and the many hospitals. With the support of our team and our partners, Ciena will continue to play a leadership role in positioning the sector for success and will emerge from this as a stronger company of which we are confident. Thank you for your participation in the call today. We are pleased to now answer any questions that you may have.
And your first question comes from the line of Johan Rodriguez with Raymond James.
First off, I just wanted to commend your team, the work that you staff, you know, Glos used the right word is heroic. So I can't imagine what it must be like on the front lines in those facilities. So they all have my sincere reverence. Just turning over to the questions, how much of the decline in the retirement residences in Q1 would you have attributed to COVID versus the oversupply issues that had previously been there prior to all this?
Actually, I know, Johan, Q1 usually is part of the flu season before even the pandemic. And usually, occupancy does not improve significantly in the first quarter of the year. We saw some decline. January February were, in some essence, business as usual, because the pandemic did not really gain spread during that time. However, March, we believe that it had quite a bit of impact on our numbers because of COVID-nineteen and that impact was further was bigger in April as well.
Okay. So maybe the 11% decline in same prep NOI, what do you know do you have a I know it's a tough question, but do you have a sense as to what that would have looked like at the end of February prior to the outbreak of COVID?
Yes, it's hard to do that because there are so many puts and takes during the quarter. In Q1, we also this was a leap year. So we had additional around $200,000 of expenses in this year, which we didn't have in last year. So that will account for, let's say, 1% or a bit for that. I think it's hard to answer that question because to segregate the impact of COVID-nineteen versus not, we can do it from an expenses side, but to do it from the sentiment side of not being able to admit new residents, I think it's very hard to do that at this time.
Yes, fair enough. Okay. And then the lawsuit, is there anything there? And is it the same party or same lawyer as the 2018 cases? Is there any relation there?
Or maybe just some more details?
Well, sorry, it's Lois. I don't know how, but I got kicked out of the call. So I apologize for that. And thank you, Nitin. Yes, we've just learned of this proposed class action related to COVID-nineteen pandemic.
We are reviewing it, and we do expect it in due course through the appropriate court process that we'll respond. As you know, we cannot otherwise comment on litigation.
Your next question comes from the line of Jonathan Kelcher with TD Securities.
Thanks. Good morning. Just sticking on the retirement side, so I just want to confirm the occupancy was down 140 basis points March to April. Is that am I reading that correctly?
That's correct, Jonathan.
Okay. And what would your sort of move outs be normally, your turnover normally?
I think on an average, we have around 1 square of residents who move out. So when we look at our move in and move outs data for this quarter versus previous quarters, what we did see is actually a reduction in both of them. The move ins were lower, obviously, because we were limiting people who can move in. And the move outs also slowed, especially during end of March April. The numbers are not meaningful, Jonathan.
Like if you do a percent, the percent might show bigger than worse is what the numbers might be. And then we also had some people moving from converting from short term to long term stays.
Okay. Do you so the I assume you're going to see a decline in May, too. Do you have a sense of how that is going to be versus April or is it too early to know?
Yes. I mean, our average occupancy sorry, Lois, go ahead.
Yes. I would say it's consistent. I mean, we're not obviously able to move a lot of residents in. We are still moving in, but it would be for kind of essential services only because for seniors living alone through this horrible experience, it's been very, very difficult. So we have seniors that aren't doing well at home, living alone and trying to access, get groceries and medications and care and services that they need.
So we are admitting in preferential services. So that will and as it opens up, hopefully in the coming days weeks that we'll be able to ensure safety with the advanced testing and be able to move people in, seniors who again are really not doing well living alone through this experience. So that may we may start to see a slower increase in admissions. But again, we would only do so to keep everybody safe through the advanced testing and isolation protocols and so on. With respect to move outs, again, they have slowed and primarily because no long term care home is admitting.
And so normally what Zix has shown us is because a lot of residents in retirement who need care and services at a certain point will move into a long term care and that has significantly slowed, Jonathan.
Okay. And you talked a little bit about testing there. Have all your long term care residents been tested now?
Yes. We're just in the process. The goal was, as part of the action plan in Ontario, and I'm just speaking for Ontario right now, because BC is a little different. But there was a mandate for advanced testing and it was to be completed by this Friday, May 15, that all residents in long term care and all retirement residents retirement residents will be as well. So that's well in process.
I believe that about 65% to well, as of yesterday, now it's happening rapidly, but about 70% of our residents as of and team numbers as of yesterday have been I
guess, everybody's through the testing, will they continue to do like once, I guess, everybody is through the testing, will they continue to do sort of ongoing testing of employees?
Well, certainly, that's something we're working through with government and the health authorities now or the public health, or public health unit, because this is really the way to keep COVID out of our homes, because team members who may be asymptomatic and that's really been the main issue in terms of outbreak to this point is asymptomatic team members that pass the screening and don't realize that they have it. So this is really, really very important to have advanced testing, widespread testing of team members on a regular basis with a quick turnaround time because our goal also is to get team members back to work better off.
Okay. But that is something the government is looking to do?
Yes. Yes. Yes, it's very important because the prevention is of spread.
Okay. Thanks. I'll turn it back.
Your next question comes from the line of Pammi Bir with RBC Capital Markets.
Thanks and good morning. Just I realize that it's still early, but what are your internal assumptions on when you may be able to start opening access for resident tours in the retirement owned portfolio and perhaps nonessential type move ins?
Well, I think that's BC, Pam, is our experience in D. C. Is that there is we have had thankfully no active cases in staff or in team members or in residents. And there, I mean, I think the whole the spirit, I know the residents are getting very anxious to get out and to have visitors and so on. So we anticipate there, it will probably be first.
We're already planning to for resident dining and focusing on the resident experience, a number of things that we can do there. But I think it will be in BC first. And as I said, we are moving We do anticipate over the coming months that we will be moving in residents certainly in BC. But again, our priority here is to keep COVID out of our homes and residences. So we would only do it with certain protocols around testing and so on to ensure that everyone is safe.
Got it. Just in terms of the additional COVID related costs in long term care, is the expectation that most of those costs will be covered by government funding other than perhaps some maybe timing differences? Or is there a possibility that some could actually just slip through over the year?
It's probably hard to tell, Tammy. I think governments have been extremely supportive in every way, including provincial directives, access to PPE, guidance and so on and very collaborative. So that's been extraordinarily helpful. It's hard to say. I mean, there's just so many expenses here.
There definitely will be timing considerations. And in course, hopefully, the majority are, but it's kind of an unknown at this time. I don't know, Nitin, do you want to add?
Yes. I would just I would add to that. Both, especially Ontario and BC, both have been very supportive in covering some of the costs. We do expect there would be some timing challenge. And there could be some costs which are not covered as well.
And again, as we have further visibility on it and we will continue to provide disclosure over time.
Got it. And then just in terms of the labor shortage, can you maybe expand on how you're working to address that? I know you made some comments, but maybe and also what impact that might have over the balance of the year on retirement on the retirement segment?
Well, with respect to staffing, as we said, the challenge was even before the pandemic. It was I think probably staffing challenges across the board, across the sector. But what we've really been focused on is moving part time to full time. So we've had good success with that. We're very, very pleased that a number of team members have chosen to go from part time to full time.
The other is returning to work. As of today, we've got a number of team members who are off. I think we have about 170. But we also have a number that have now of team members that have now been resolved. So as that happens, we hope to get more and more team members back to work as well as we can we're recruiting.
So we've recruited many, many, many workers. And we've also introduced a new role, which is a care support assistant role, which has been very helpful. So we're bringing on a lot of new people and providing the education and orientation, they're a real support to the team and to residents. Yes, I think we have about 71 team members that have been resolved to date. And so we hope to continue on that vein and get people back to work.
Thanks. That's helpful, Lois. Maybe just one last one. Coming back to the proposed class action, can you remind us, again going back 2018, I believe that lawsuit ultimately got discontinued. But are these lawsuits typically covered under your insurance coverage?
Well, first, I guess, just, 1st of all, as you know, operating in this sector does entail a certain amount of liability and litigation risk just because of the nature of what we do. But all of our policies continue to be in effect, including resident care. So we have as far as we know, these also include anything related to pandemic. So like we're not aware of any exclusions from our policies.
Your next question comes from the line of Troy MacLean with BMO Capital Markets.
Good morning. Lois, you mentioned that some of your LTC properties were particularly hard hit. Was there any correlation between if it was a newer home or an older home that was going to be redeveloped that led to a bigger outbreak?
Yes. So is there a theme there? Yes, definitely. In the C Homes and so these are, as you know, the older homes, 40, 50 years old, 4 Bad Ward, really small congested spaces. On average, it's about 300 square feet per resident compared to about 600 square feet per resident in a new A Class home.
So very difficult. And once the virus gets in, in every case, it has come in with a team member who was asymptomatic when we've done the tracing, It's very difficult because there's unfortunately residents in 4 bad boards or rooms. And it's really difficult to put the isolation protocols in place where you're isolating residents. And once you have a COVID positive and you're waiting for test results and so on, it's difficult to start moving residents around and potentially exposing unnecessarily and so on. So it becomes very complicated in a C Class home.
So I think that's definitely been the experience to date, if you look at it, is that it is worse and harder to contain in the C Class property.
And I know this is early into this, but is the industry calling for maybe a quicker adoption of the capital renewal program or more funding to kind of accelerate that program? Or is it just
kind of wait till this
is over before that's decided?
Yes. Well, I think that will come. I mean, right now, we're really we're focused on managing this situation and containing it. We do, as I said, we have a number that have been particularly hard hit, 2 of which are C Class Homes. So we're really I think the sector is really focused right now on doing everything we can to do the right things to manage this pandemic and be able to manage them looking out further.
So that will come as well, I'm sure, other policy changes and so on, which we would welcome to participate in those discussions and to be a part of.
And then on the policy where you can only work in 1 home or residence, is that likely to be permanent after all this is over? And does that have any implication for kind of the wage structure for the industry?
Well, it may. And it's not a bad thing. I mean, the challenge is logistically doing that because we do need part time workers just by virtue of having a 20 fourseven business because you need workers on nights and weekends and to cover off. So that's why it is what it is, why we do have a number of part time workers. It's important that we have that flexibility and it's also kind of structural around how the scheduling and collective agreements go.
But in terms of if it did, I think we do want more full time workers, and that's one way to do it. But the other is that remember, we're all pretty much unionized, particularly in long term care. It's the collective bargaining kind of has the wages established. So we're not sure where that will go. But the main with the temporary pandemic pay relief that has been put in, in both provinces is extraordinarily helpful in recognizing the work that the frontline workers are doing in every sector that where we have essential workers.
Your next question comes from the line of Yash Sankpal with Laurentian Bank.
Good morning.
Hello, Yash.
Hi. Just want to understand why DC has not seen any cases versus Ontario, which I've seen many cases in Quebec? Have you guys been able to trace that to a particular factor?
I think it's difficult to say, Yash. I mean, the nature of this virus is changing, whether, 1, as we know, it definitely has a higher prevalence in densely populated areas, like the GTA. A lot of our properties in BC are not like they're in interior and areas that aren't as densely populated. So that may be 1. Climate may be another one as well as the precautions that have been put in place.
I wouldn't say have been really any different than what's been done in Ontario. We've put the same precautions in place in all of our residences across the country. So it's not sure that, that has one other than it's probably because it is community spread, I think that just the prevalence has been lower in BC.
Okay. And your retirement home margins, despite the occupancy decline, have been holding quite nicely. And just want to understand, I don't think it is happening, but is any government support for those expenses helping those margins?
No. I mean, any support for it's really a flow through. It just goes to support costs, expenses that you incur as you incur them. Jatin, do you want to add to that?
Yes. I mean, there's no change. Our full year margin for last year for the time was around 44.7%. So we did go down as it reflected in occupancy, and we talked about us not adjusting expenses because we wanted to ensure that as a company, we are ready. There was a surge capacity from hospitals, which did not happen.
So, we do see a decline in margin and there is no government help, which will cover our expenses. There's some government help more from our COVID related expenses, which is not material for Ciena, but would cover expenses such as PP and E and additional screening for retirement homes.
Okay. And just want to understand the support that government is providing to your staff, various initiatives, does that amount flow through your P and L at all? Or is it a separate
thing? Yes. For wages, again, we are there will be further details provided on it. But if it's due for it would be similar to long term care where there's revenue and expenses that match. But again, we are awaiting further information on it from Ontario.
Okay. That's it from me. Thank you.
Thank you.
Your next question comes from the line of Tal Woolley with National Bank.
Hi, good morning. I guess one of the questions I wanted to ask was just about managing the outbreaks themselves. Is there a learning curve for you operationally on this? Or is each kind of situation different?
Yes. Well, there definitely is I think there's well, there's definitely a learning curve for everyone. As you can see across the country, I think governments and everyone are working collaboratively to understand the nature of the virus and how it spreads and what precautions are most helpful. So I would say it's learning for everyone and that's why the situation evolves so rapidly. But we have certainly learned around to Troy's question about a C home and how it spreads and what to do.
So there's a lot of lessons learned here that we would, I think, apply to for the future because there's this there may be future spreads, a resurgence in the fall or in the coming months. So we're all focused on managing this one and then really are already starting to apply lessons learned in each case as we as new cases pop up or as another outbreak occurs that we're learning from every day around how to manage the situation.
So you are finding that at least like versus outbreak 1 versus outbreak 8, like the response is getting a little smoother for you guys operationally?
Well, I think just because our most severe outbreaks are in homes that where it occurred over 35 days ago, so late March, early April. I think and that's I think the experience if you look where the most severe cases are, it's those that happened earlier on, certainly in Ontario and in BC, before some of the additional precautions were put in place, like universal masking and broader testing and some of these other things that we're now doing, which are very helpful.
Okay. Given that we're a little of the ways into this now and the government has been offering up additional funding, do you have a sense of how long like that the $240,000,000 that the government has put up, how long does that fund do you have an idea of how long that funds the incremental costs you guys would be facing? And maybe when the industry and the government might have to have another conversation around cost?
Well, I think it's too early to tell. As we said, depending on the severity and the length of time that this goes on with this intensity and the nature of the outbreaks that it will depend. I think what's been committed is very helpful and we'll just have to work through, we learn more every day around what the expense is. And so that will come out in due course, and there will be timing issues, certainly.
Okay. And then lastly, the Ontario Minister of Long Term Care sort of came out and said that, yes, there is going to be not going to be right now, but there certainly will be a review of how the system is Stanza is constructed going forward. What are you anticipating are going to be the primary or what should we be thinking about as some of the big issues that will need to get tackled in that review?
Well, I think there will be a number of things. The capacity in the system, potentially staffing levels. Long term care has always been set up as a place for to make it home like for residents. So just by virtue of the nature of what we do, they're not set up long term care homes are not set up like hospitals with extensive infection prevention control and all of the things that the cleaning protocols to the extent that you would in operating theaters or somewhere. We're just not set up like hospitals by virtue of the nature of the business and the services that we provide to residents that is much more home like, including their own furniture and so on.
So there will be a number of things, including the capacity and the C Homes and there's a number of things. But we would certainly welcome the review and would have we've learned a lot that we would welcome participation in that.
Okay. Thanks very much, guys.
Thank you.
And your next question comes from the line of Brendan Abrams with Canaccord Genuity.
Hi, good morning. Maybe just following up on Tal's question. What if we're looking at the future of the industry, what I guess structural or permanent changes do you envision to the operating model? I know other sectors are adapting to more physical distancing measures, if it's an airline not booking the middle seat or restaurants opening at reduced capacity, things like that. I'm just wondering what, I guess, changes to the operating model in the future you see becoming a little bit more permanent?
I think it's difficult right now. This is what we're learning now. But for sure, it's going to require broad scale ongoing testing for team members and families as they because we do want families to be coming back in and volunteers and to improve the residents' quality of life. It's been extraordinarily difficult for residents in isolation for so many days weeks. So we do want that families to be able to get back in.
So it's going to require broad testing as well as significant access to PPE and training, just on infection prevention protocols for everyone who would be coming into and as those restrictions open up a bit on visitors.
Okay. But I guess maybe longer term, do you see like whether it's capacity, reductions in capacity or number of residents in a home or increased staffing to resident ratios like can
that become more permanent future?
How does that impact margin?
Any range of those things are possible. And I think it's just too early to tell where that will go. I think everybody, as I said, are really focused on current crisis and getting through this and managing the residents' care. That's the real priority, keeping our residents safe, giving them the care that they need and managing the social isolation and protecting team members. So that's really the focus right now and that will come in due time as what other changes in the future to set us up for success and to be able to provide the essential services that we do.
Great. Okay, that's great. I'll turn it over. Thanks.
Thank you.
Your next question comes from the line of Chris Couprie with CIBC.
Good morning. Just a very quick one from me. A clarification from Jonathan's earlier question with respect to April's same property occupancy
in terms of
the month over month change. Is it the 85.1%, which is the average for the quarter or the 84.5%, which is the as at same property for quarter end?
Yes. So why don't they give you some numbers just so there's no confusion. So end of Q1, our average same property occupancy was 85.1%. And in April, the average is 83.7%. And for Q1, the average is 84.
Sorry, as at is 84.5 percent and as of April is 83.3 percent. So Jonathan's question was, if I understood correctly, was 140 basis point decline in average and we saw that 140 basis point decline in average and now on 120 basis decline in as out.
Got it. Thanks. And then, I think you alluded to earlier that, while we're having fewer move ins, we're also having fewer move outs to long term care. Just want to get a sense of, is there a kind of a pent up move out situation? Or is the idea or do you think that once long term care is accepting people again, these people will generally try and stay in the residence stay in your residence longer than normal?
We would certainly encourage them to stay as long as we're able to provide the level of care. There may be some that really do need a long term care. I think the lesson learned is that there might be residents that were maybe moving out and have done okay living in retirement residents for a longer period of time. So that will be one of the takeaways, we hope. But there will be residents for sure that do need more care and services and will move out or there may be residents right now in hospital that may not be able to move back into a retirement home depending on what their needs are.
Thanks very much.
Your next question comes from the line of Himanshu Gupta with Scotia Bank.
Thank you and good morning. On balance sheet, dollars 280,000,000 of debenture maturing early next year. I know there is some time left there, but what are your thoughts on unsecured debt market? And also have the mortgage spreads moved for the retirement sector given the current sentiment?
Sure. Hi, good morning, Himanshu. So the unsecured market is quite volatile in this during this time. There have been some REITs which have been able to access the market. The spread could be anywhere from 300 to 400 basis points at any given time.
So I think it's hard to predict that. From a CMHC financing perspective, we are in the process of financing couple of our properties, which are CMHC eligible. Those spreads have been overall stable. So there's not a lot of change there. And to your first question about Series B, it's coming due next year.
We did buy $30,000,000 of it some time back. We reduced the amount, which is outstanding. And given our current liquidity, our focus on adding more as we are financed the additional properties, our access to CMHC financing, access to mortgage market. We do believe at this time that we will have quite a few options to be able to refinance it when it comes to you.
Sure. Thank you, Nathan. And maybe just a follow-up on occupancy. What was the percentage decline in new movements in the month of April and maybe May so far? It sounds like you're still moving residents on emergency or essential basis.
Yes. Just maybe from an average perspective, again, Jonathan had a similar question. I think the numbers on end of March April, the move ins have been in very specific cases and only the homes which are not in any outbreak. I think it's hard to make up trends just using 1 month of number. So the numbers were lower than previously, but I think it remains to be seen how that impacts us going forward.
And with that, I'll turn the call back to Ms. McCormack.
Thank you, Zenyatta. Well, thank you all for joining us this morning. We really do appreciate your ongoing support. This is a difficult time for everyone, for businesses and certainly for this sector. Really want to thank all of you for doing your part to keep yourself, your loved ones and for keeping society safe.
So thank you, and we'll look forward to our next call. And hopefully, things will be better at that time with respect to this pandemic situation. So thank you. Have a good day.
Ladies and gentlemen, thank you for joining us today. This concludes today's conference. You may now disconnect at this time.