Realty Income Reports Rent Collections Have Stabilized
The past year has been incredibly rough for financial stocks, especially real estate investment trusts (REITs). REITs with retail exposure fared the worst, especially mall REITs. The triple-net REITs like Realty Income (NYSE: O) fared better since more of their tenants were considered essential businesses and were able to remain open during the lockdowns. That said, many tenants have had issues; however, it appears that collections have stabilized.
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Realty Income is a triple-net lease REIT, which has a somewhat different business model than the typical retail or mall REIT. The company focuses on stand-alone properties, and the tenant is responsible for all of the expenses, including taxes, maintenance, and insurance. The company generally has longer-term leases with companies that are less sensitive to the economic cycle. Realty Income's top four tenant groups are convenience stores, grocery stores, drug stores, and dollar stores, which represent 37% of revenue.
Source Fool.com
