Evictile Dysfunction

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What's going on?

Private equity heavyweight Blackstone and British mall operator Intu are struggling to get their rental payments to come on time, and all this coronavirus-related stress isnt helping.

What does this mean?

Its not just Average Joes who are having trouble covering their bills: with coronavirus forcing the world into lockdown, companies have likewise been asking for more time to get their rent together.



Blackstone, the UKs largest small business landlord, has agreed to defer payments for three months, but its tenants are at risk of being kicked to the curb if they cant pay by then. Intu decided to reduce its service charge fees, but it didnt seem to make much difference: the mall operator only received 30% of the rent it was owed this week. And given that Primark and Topshop (in the UK) and The Cheesecake Factory (in the US) have said theyll continue to withhold rent payments, that doesnt look like itll change any time soon for Intu or others like it.

Why should I care?

For markets: Real estate gets real.


One popular way to invest in property is through real estate investment trusts (REITs) many of which are listed on the stock market. Part of their popularity could be down to the fact theyre asset-backed i.e. tied to something physical which keeps their values more stable than your average stock. Just keep in mind that if a real estate companys income stops flowing because, say, its tenants stop paying rent, investors could be hit with the double whammy of falling share prices and declining property values.



The bigger picture: House sales self-isolate.


Spring is typically a popular time to buy and sell property, but since people arent free to view properties like they normally would, real estate portal Zoopla estimates UK house sales will drop by 60% in the next three months. House prices wont necessarily follow, mind you: theyre more influenced by the economic fallout from coronavirus, like unemployment.

Originally posted as part of the Finimize daily email.

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