Given the significant ongoing economic disruption, we would like to update you on our April and May performance. We’re pleased so far with our tenants’ relative strength in the face of today’s headwinds.
Despite the negative shock, to date, we have only executed temporary rent modification agreements with two tenants, and received requests from fewer than five others (although no modification was ultimately granted). The amendments came in the form of short-term rent deferrals, with such deferred rent to be repaid by the end of 2021.
Based on the revised 2020 budget as adjusted for such lease amendments, we have collected 100% of contractual rent obligations due in April and May. Not including the rent deferrals, our collections equate to 86% of the base budget over such months, although we remain confident that the rent deferrals will be fully repaid per the amended terms.
Please be mindful that despite these positive results so far, we are in uncharted territory and precise forecasting of the continued economic impact is futile. Our belief has always been – and remains – that by using conservative financing and maintaining a creditworthy rent roll, we should have the financial flexibility and wherewithal to emerge on the other side should we incur economic turbulence. So far, we have avoided negative outcomes, but the road ahead remains uncertain.
Our focus today is on generating an acquisition pipeline that targets properties which may, conversely, be forced into a sale at more attractive pricing than we have seen in the recent past. It may take time for these opportunities to emerge, so patience is required as the commercial real estate market begins to thaw from its recent freeze.
The markets are facing unpredictable health outcomes and a murky economic recovery – investing with a margin of safety will be critical.
Mr. Wills is the Marketing Director and Head of Product for Streitwise.
Prior to joining Streitwise, Mr. Wills was Head of Paid Media at Bitcoin IRA and Fortress Gold Group. Previously, Mr. Wills was the Director of Lead Generation at GTMA, a real estate marketing agency, where he founded the paid media department that oversaw a large nationwide portfolio of multifamily properties. Mr. Wills holds a Bachelor of Science degree in Marketing from the University of Florida.