Energy Infrastructure REIT CorEnergy Unscathed by Tenant Bankruptcies

Dave Schulte, president and CEO of CorEnergy Infrastructure Trust, Inc. (NYSE: CORR), joined REIT.com for a CEO Spotlight video interview at REITWeek 2016: NAREIT’s Investor Forum at the Waldorf Astoria New York.

CorEnergy primarily owns midstream and downstream energy infrastructure assets that perform utility-like functions, such as pipelines, storage terminals, and transmission and distribution assets.

Schulte commented on the bankruptcies of two of CorEnergy’s largest tenants, Energy XXI Ltd. and Ultra Petroleum. He pointed out that the anticipation of bankruptcy filings for both companies has been in the market for quite some time. Furthermore, since filing, both companies have added CorEnergy to their critical vendor list and rents have been paid on a timely basis, he said. “We’ll survive in fine shape,” Schulte added.

Schulte also highlighted the benefits of the REIT model in owning energy infrastructure assets.

Looking ahead, Schulte said growth is likely to come from the addition of new assets, “which we have the capacity to do under our current financing relationships, without needing any new equity.”

Another source of growth is from the contracts already in place. “Increasing volumes through our customers’ facilities translates into higher rents. In the long run that adds to a very attractive long-term total return potential,” Schulte said.