Free-Standing Retail REITs Rent Collected See Jump of More Than 12 Percentage Points
Industrial Sector Remains Strongest Performer
WASHINGTON, DC, (July 22, 2020) — Nareit has conducted its fourth monthly survey of REIT rent collections in the wake of the COVID-19 pandemic and related economic dislocation. Re-openings in many parts of the country beginning in May continue to have a positive economic impact on REIT rent collection, Nareit found. The July survey results show continued improvement in almost all sectors, with industrial remaining the strongest performer.
Numerous Sectors Show Continued Signs of Recovery
• The retail sector continued to make improvements in July, with both free standing and shopping centers making substantial gains in rent collected. Free standing retail REITs rents collected are up over 12 percentage points to 91% this month. This represents a 21-percentage point improvement from May. Shopping center REITs retail rents collected are up nine percentage points to 69%. This represents a 20-percentage point improvement from May.
• The industrial sector remained the strongest performer with collections over 99% of typical July rents. Survey respondents did not report any forbearance for May through July and report deferring just 1% of sector rent in June and July.
• The office sector’s July rent collections were in-line with June, decreasing from 97% in June to 96% in July. June survey respondents reported deferring 1.5% of sector rent owed by equity market cap while July survey respondents reported deferring 1.7%.
• Apartment collections remained substantially the same at 96% of typical rents collected in June and July. Rent collections for June and July remain higher than in April and May.
• Health care REITs held onto their gains from previous months, with July rent collections at 95%. Respondents reported substantially the same level of rent deferrals in July as in June for 4% of rent by equity market cap.
“In July, we continued to see reopening have a positive impact on rent collection across the REIT industry,” said John Worth, Executive Vice President for Research and Investor Outreach at Nareit. “Recognizing that the economic health of landlords is linked to the economic health of tenants, businesses and society successfully dealing with the challenges of responsibly reopening is critical to the collection of rent and demand for real estate.”
For the full research note along with tables of the rent data, visit reit.com/data-research
Source: Equity market capitalization weighted. Nareit survey of members, public disclosures, and FTSE Nareit All REIT index equity market capitalization as of June 30, 2020 via FactSet.