Adventus Realty Trust by its Trustee, Adventus Realty Services Inc. (the "Trust" or the "Company") announces an update on the impact of the novel coronavirus (COVID-19) pandemic on its business.
The table below summarizes our Stress Test results, actual rent collections received to date, and revised estimate of rent collections for each respective month:
|May 2020||June 2020||July 2020|
Rent Collections – Original Stress Test (1)
Rent Collections – Actual to Date (2)
Rent Collections – Revised Estimate (2)
(1) as communicated in our April 14, 2020 News Release and April 23, 2020 Investor Conference Call
(2) as of June 25, 2020
We are constantly monitoring these collections and are carrying out a comprehensive review of tenant rents to estimate the amount which may not be collected. We have been proactively managing collections to meet or exceed our 85% stress testing and will continue to update investors of our rent collections as we maintain our enhanced communication during this time.
Adventus received several requests for rent relief over the past few months. All the requests were researched extensively resulting in Adventus entering into rent deferral agreements with several tenants while declining assistance for a number of other tenants where their financial condition did not warrant rental relief. The June 2020 Rent Collections - Revised Estimate (96%) section above indicates 4% of rents not collected. The 4% is comprised of approximatively 1% in rent abatement (forgiven rent), and 3% of rents which are deferred and will be repaid over the next 6 to 12 months. To date, the 1% abated rent is holding constant, but our concerns are with increased deferred rent and deferred rent becoming abated rent as the pandemic lengthens.
In addition to rent collections, our focus now includes monitoring the financial solvency of our tenants. Notwithstanding that our portfolio has a large percentage of Fortune 500 companies; we do anticipate some of our Tenants will have financial challenges if the timeline for COVID-19 is extended.
Leasing activity has decreased over the last few months due to uncertainty from the COVID-19 pandemic. However, Adventus continues to experience positive movement in leasing and we are pleased to inform our investors about a new lease that was recently completed in our Chicago portfolio. This lease is with a large, US based multi-national tenant which will occupy between 10,000 s.f. and 20,000 s.f. in one of our premier assets in the portfolio. The deal terms are favourable and similar to the pre-COVID market. In addition, Adventus has responded to Requests for Proposals for four other tenants looking to move out of the Chicago downtown core into the suburbs. We believe that this trend will continue for the near term and will result in increased leasing activity in our suburban portfolio.
Thank you for your continued support.
Adventus is a Canadian based private Real Estate Investment Trust (REIT) and is focused on US income producing commercial real estate, in the suburban office markets of Chicago, Illinois and Atlanta, Georgia. For more information on Adventus, including our team, corporate strategy, photo gallery, details of our portfolio and press releases, we invite you to visit our website at www.adventusrealty.com.
Cautionary Statements Regarding Forward-Looking Statements
This press release may contain forward-looking statements with respect to the REIT and its operations, strategy, financial performance and financial condition, as well as with respect to the previously disclosed acquisitions and future acquisitions of properties. These statements generally can be identified by the use of forward-looking terminology such as "anticipate", "believe", "plan", "forecast", "expect", "intend", "would", "could", "if", "may" and similar expressions. The actual results and performance of the REIT and the acquisitions discussed herein could differ materially from those expressed or implied by such statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, changes in interest rates, competition and changes in securities or other laws or regulations or the application thereof. The cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf.
Unless otherwise stated, all forward-looking statements speak only as of the date of this press release. Except as required by applicable law, the REIT specifically disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
ADVENTUS REALTY TRUST
By its Trustee: ADVENTUS REALTY SERVICES INC.
Per: Rodney B. Johnston, FCPA, FCA
President and Chief Executive Officer