» Slowdown spreads across real estate.
Property owners that rely on rental income are grappling with the severe consequences of a pandemic that has left many of their tenants unable to pay the bills.
Houston-based Weingarten Realty Investors said this week that uncollected revenue related to COVID-19 amounted to $9 million in the first quarter. In April, the real estate investment trust collected $24.8 million in rents, just 64 percent of what it was due.
A real estate investment trust that owns primarily grocery-anchored shopping centers, Weingarten has deferred rent for the next several months on about 700 leases, totaling $10 million in collections, the company said Friday on a conference call with investors to discuss earnings.
Despite the strain, Weingarten said that its grocery tenants have remained busy throughout the crisis and that its Houston portfolio has always held up through energy downturns.
“Today’s a big day in Texas as we reopen salons. Everything we’re hearing is that they’re very busy,” Johnny Hendrix, executive vice president and chief operating officer, said in the Friday call.
Apartment landlords are also feeling pain as tenants who have lost jobs struggle to pay rent.
Camden Property Trust, also a Houston REIT, said that for April, the first time rents were due following the March stay-home orders, it collected 94.3 percent of monthly rents due, compared with 98.6 percent a year earlier. Delinquent rents amounted to 3.2 percent, and 2.5 percent were deferred or set up for payment plans. The company said its typical monthly delinquency rate is about 2 percent.
Camden has made adjustments to parts of its business in response to the pandemic-led economic crisis. It temporarily
suspended construction of a development in Plantation, Fla., and has been leasing apartments remotely. It also launched resident relief funds that have paid approximately $10.4 million to 8,200 residents.
Camden CEO and Chairman Ric Campo and Executive Vice Chairman Keith Oden each agreed to reduce the amount of their annual bonuses by $500,000. The company will apply that $1 million to resident relief funds and to a $3 million bonus paid this month to fulltime on-site and construction employees who have continued to work through the pandemic. Each has or will receive $2,000.
Camden’s current occupancy rate is about 95 percent, which is near its long-term average.
New rental rates in April were down 2.5 percent compared with a year earlier, and the number of new leases signed during the month was off 35 percent to 1,322 year over year.
Camden has not raised rents on renewing tenants and its renewals were up 44 percent to 2,485, the company said this week.
The company posted firstquarter revenue of $266 million, up from $248 million in the same period a year earlier. Net income was $43.3 million, up from $38.6 million. Funds from operations, a commonly used measure of cash flow for real estate investment trusts, was $136 million, or $1.35 per share, during the quarter, up from $121 million, or $1.22 per share, in the first quarter of 2019.
Camden owns interests in and operates 164 properties containing 56,107 rental units across the United States. The company’s stock rose $1.20, 1.4 percent, to close at $88.46 a share on Friday.
Weingarten posted lower revenue and funds from operations in the first quarter.
Quarterly revenue was $111 million, down from $123 million in the year-earlier period. Funds from operations, a measure of cash flow for a REIT, was $56.9 million, or 44 cents per share, compared with $67.3 million, or 52 cents per share, in 2019. Net income was $52.6 million, 41 cents per share, up from $49.7 million, 39 cents, in firstquarter 2019.
“With a portfolio of primarily grocery-anchored centers providing goods and services to the public, supported by a resilient balance sheet and strong liquidity, we are optimistic our centers will be on the front-end of the recovery curve,” Drew Alexander, chairman, president and CEO, said in a Thursday news release.
Weingarten owns or operates 167 properties, some through partnerships, in 16 states. The company’s shares were up $1.02, 6.2 percent, to close Friday trading at $17.68 a share.