Why W.P. Carey Turned Out to Be Pandemic-Proof
When the coronavirus pandemic hit in 2020, many real estate investment trusts (REITs) went from reporting occupancy to simply reporting how many tenants were paying rent. W.P. Carey's (NYSE: WPC) rent collection rate, however, never dipped below 96%, while some of its peers saw collection rates dip into the 50% range. Basically, W.P. Carey didn't skip a beat while some of its peers were under intense pressure. Here are some of the reasons for that important difference.
One of the hallmarks of W.P. Carey's business model is diversification. It generates roughly 26% of its rents from industrial assets, 25% from warehouses, 20% from offices, 18% from retail, 5% from self-storage, and the rest from a broad "other" category. You know diversification is good for your portfolio; well, it's also good for a REIT's portfolio.
Indeed, the retail sector was really one of the hardest-hit property niches, and it was one of the smallest segments of W.P. Carey's portfolio. Meanwhile, industrial, warehouse, and self-storage assets performed quite well in the face of the pandemic. Offices in general, while not filled with employees, found that tenants continued to pay contractual rent.
Source Fool.com
