Retail REITs earnings at risk after Bed Bath & Beyond bankruptcy - Credit Suisse

Federal Realty Investment Trust

24/04/2023 11:20

** Credit Suisse believes 2023 earnings for retail real
estate investment trusts (REITs) will likely come under pressure
as Bed Bath & Beyond Inc  BBBY.O  filed for bankruptcy on Sunday
after it failed to secure funds to stay afloat
    ** Brokerage sees potential downward pressure on net
operating income (NOI) margins and higher uncollectible lease
income for retail REITs as BBBY vacates the stores
    ** "... backfilling tenants is time-consuming and costly,
and typically results in a period of downtime as operators
reconfigure the space" - CS
    ** Broker believes RPT Realty  RPT.N  at "greatest" risk of
experiencing earnings drag from finding new tenants as roughly
2.3% of annualized base rent (ABR) is derived from BBBY 
    ** Meanwhile companies like Brixmor Property Group Inc
 BRX.N  and Federal Realty Investment Trust  FRT.N  derive less
than 1% of ABR
    

 (Reporting by Roshan Abraham)
 ((Roshan.Abraham@thomsonreuters.com))