The REIT industry’s focus on the needs and concerns of its tenants will become increasingly important as a result of the coronavirus crisis, according to Gil Menna, co-chair of the REITs and Real Estate M&A practice at Goodwin.
Speaking on the Nareit REIT Report podcast, Menna said one of the ways that REITs can be opportunistic in the current environment is by focusing on unique ways to deal with tenancy concerns that evolve from the pandemic.
“Trying to attract tenants back to [real estate] space, using the space in a way that’s novel and useful to tenants to addresses their needs and concerns—and helping them psychologically become productive again—will be an important part of the opportunity set available to REITs,” Menna said.
Going forward, one of the developments Menna said he will be watching carefully is how capital is being deployed—will companies stick to pre-coronavirus strategies and use capital to reposition properties, or will they instead direct the money to “tenancy needs in a new era.”
Amongst other topics, Menna also noted that REITs had relatively strong balance sheets coming into the crisis. “If we find a vaccine relatively soon, I think that the strength of the sector as a whole…is strong enough not to have to dilute investors by raising equity capital to shore up the balance sheet.”