Office REIT Cash Flow Faces Risks From COVID-19
Leases up for renewal are being signed for shorter durations as tenants seek time to assess the effects of the pandemic on the economy.
September 4, 2020 | Nate Robson | GlobeSt.com
The boom in working from home due to COVID-19 could crimp office REITs’ cash flow, according to a new report.
The report from Fitch Ratings expects that a long-term shift to remote work will reduce demand for new space and raise risks for future lease renewals. The office REIT sector did well in terms of rent collections after stay-at-home orders were issued, and only 10% of leases are expected to expire in the next few years.
But leases up for renewal are being signed for shorter durations as tenants seek time to assess the effects of the pandemic on the economy.
