Columbia Property Trust in “Good Shape” to Handle Economic Slowdown

Columbia Property Trust, Inc. (NYSE: CXP) executives said March 26 that the office REIT is in “good shape” to handle the economic challenges caused by the ongoing coronavirus pandemic.

In a conference call with SunTrust Robinson Humphrey, Columbia President and CEO Nelson Mills said, “for the next year or two we think we’re in good shape, and we can handle even more of a prolonged downturn—we’ve got some room there.” He added that the quality of Columbia’s assets is a “great mitigant to risk.”

Mills stressed that Columbia has always maintained a conservative balance sheet posture, “and this (crisis) proves out why.” He added that based on the extent of the current crisis, Columbia could consider maintaining that conservative position for longer, or even being “a bit tighter” with the balance sheet.

In terms of Columbia’s portfolio construction, Mills said that going forward, the selection of properties and how they are configured for tenants is something to reflect upon. “We’ll be a little bit risk-adverse for a while in terms of new acquisitions and projects. That’s certainly something we’ll reflect upon as we absorb this over the next few weeks,” he said.

Jim Fleming, Columbia’s CFO, said the company feels “really good about where we’ve gotten to. It’s been a long road to move the portfolio to higher-quality, more-desirable assets…I think we feel good about the business model long term.”