Sam Zell’s Equity Commonwealth has not had many problems collecting rent so far, but the company was very light on details about the pandemic’s impact apart from that in its first quarter earnings call on Tuesday morning.
The office real estate investment trust had 98 percent of its contractual rents paid for the month of April, and just 3 percent of that came from security deposits and credit applications, according to CEO David Helfand. He also stressed that the company receives less than 1 percent of its revenue from retail tenants and has no co-working exposure, two sectors that the pandemic has hit especially hard.
Helfand acknowledged that the ongoing pandemic has created an “unprecedented set of challenges” but stressed that Equity Commonwealth was “well positioned to weather this storm and to thrive.”
However, he did not get into specifics about what moves Equity Commonwealth planned to make given the drastically different and rapidly changing economic landscape. He said the company’s general view is that the fallout from the pandemic is still in its early stages and that it could be months or quarters before good opportunities become available.
Equity Commonwealth’s net income for the quarter was about $426 million, while total revenue was about $18.8 million.
Zell, who was not on the earnings call, purchased Equity Commonwealth in 2014, and the company has raised about $3.4 billion by selling about 150 office properties over the past few years. He has made his money by purchasing distressed real estate amid economic uncertainty, so the current environment could prove to be another opportune one for him.