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REIT Rent collections through mid May

The National Assoc of REITs (NAREIT) conducted a survey of 6 REIT sectors to determine for April and the first 2 weeks what % of rents they've collected vs what they would normally have collected over the same period. The results are market cap weighted so results are generalizable to the broader population.

REIT % of rent may 2020.JPG

Clearly, Industrials and residential, particularly manufactured home communities, have fared best. Office is doing much better than I thought it would. Free standing or net lease REITs have a wide variation. Some such as STOR and SRC have a fairly high percent of tenants involving collections of people, to include restaurants, theaters, entertainment parks and fitness centers, while others such as VER have a smaller exposure to the 'crowd' businesses. Shopping centers are going to have the toughest time with the current conditions. Health care continues to be the greatest question mark as the % of rents collected will depend on the type of facilities.

FYI

BruceM

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Re: REIT Rent collections through mid May

Hi Bruce ...  I own STOR and O and I am keeping both;  in fact added a smidge a couple of weeks ago.  STOR has committed to monthly webcast updates up until next earnings call.  Wed May 27 is next call. 

I also own NHI which is very diversified in SNFs, Assisted Living, Senior Living Campus, Independent Living and Entrance Fee CCRC.  They collected 99.7% of April rents.  They forecast collecting 94% of May rents.  The CEO feels they are being price whacked a little much.  They are still hiring people.  Their customers are paying rent.  Residents continue to move in, admittedly at a slower pace.  

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Re: REIT Rent collections through mid May

@PaulR888 

Good info, thanks.

NHI is a well run REIT....always has been. Their historic cash flow trending has been the best of the HC group. But its primary drawback is that it is small, and I suspect this has much to do with the lack of respect its getting.

BruceM

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Re: REIT Rent collections through mid May

 Four out of the five spaces our businesses occupy are leased. As soon as the Virus became an issue in the US, the one property owned by a REIT requested my partner and I send them an updated PFS. Of course, we ignored their request and asked for relief as we paid our rent. I expect they will ignore our request as we ignored theirs. On the other hand, the owner of two of our properties contacted us and offered reduced rent. Interesting times to say the least.

veni vidi vici vti
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Re: REIT Rent collections through mid May

For the true income investors who investor for the reliable dividend, here's an update on how the big-3 net-lease REITs are looking....

triple net update jun1720.JPG

I usually don't concern myself with price changes, but in this world of unknowns, about the best we can do is take a look at what the market thinks.

Current yields are:

O 4.44%

WPC 5.69%

NNN 5.58%

Clearly, the greatest concern is NNN. They paid their May 15 $.515 Dividend, but many of their leasees are high-contact businesses, and this may make it tough to pay their Aug dividend.

WPC seems in good shape, as they raised their July dividend from $1.04 to $1.042, a .2% annualized increase

O is also virtue-signaling by raising their July Dividend from $.233 to $.234, a .4% annualized increase

We'll know financial strength much better when 2Q20 financials are reported.

BruceM

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