REITs Have Maintained Technological Savviness During Pandemic

Rich Anderson, managing director and senior REIT analyst at SMBC Nikko Securities America, Inc., participated in a video interview in conjunction with Nareit’s REITweek: Virtual Investor Conference (held June 2-4).

Anderson said that REIT balance sheets were well-positioned heading into the coronavirus pandemic, especially in comparison to what they looked like at the start of the 2008 financial crisis.

“In terms of debt-to-EBITDA, you have a much better balance sheet, in the range of 5x versus 7x back then. … You also have a better dividend profile,” he said.

And although “prices and earnings have somewhat evaporated” amid the coronavirus crisis, REITs have retained their talent and technological savviness, Anderson added, which will help them recapture lost ground in the coming months.

Anderson discussed COVID-19 research he and his team worked on at the beginning of the recent earnings season. In one piece, they organized assets based on how COVID-19 impacted them—directly or indirectly—as well as those that could be potential solutions amid the pandemic. His team also worked on a template to help REIT management teams simplify communication for analysts and investors.

Anderson also said that as a result of COVID-19, he thinks people may begin moving from cities into the suburbs, reverting back to a demographic trend made popular in the 1980s and 1990s.