Luxury Condo Rent in Thonglor

Commercial real estate markets in Asia Pacific delivered strong total returns for investors in recent years.

Average annual returns in ten major office markets in the region ranged between 5% and 20% per year during the 2016-2018 period, as compared with low single-digit returns in New York City and London for the same period.

Nevertheless, currency movements are also an important consideration for inter-regional investors diversifying into Asia Pacific real estate markets.

Given the multi-currency landscape, pan-regional real estate investment vehicles in Asia Pacific often carry a higher degree of currency volatility risk compared to peers in the Eurozone and United States.

Comparing property market returns in local currency against foreign currency-adjusted returns (for foreign investors with no hedging) shows just how different the unhedged performance would have looked to investors in different parts of the world.

Table 1 demonstrates the effects of foreign exchange (FX) gains and losses on average annual total returns between 2016-2018 for investors from different countries.

We calculated total returns for prime Grade A office markets in 21 global cities (ten in Asia Pacific, five in Europe and six in United States) in eight key currencies – US dollar, Euro, British pound, Australian dollar, Singapore dollar, Japanese yen, Chinese yuan and South Korean won.

For total returns denominated in local currency, real estate investors investing locally received positive total returns in all major markets during 2016-2018. The data also shows that prime office markets in Asia Pacific delivered stronger total returns than London and all cities in United States. Hong Kong, Sydney and Melbourne have delivered the highest total returns in the region.

Sydney, Melbourne and some European capital cities delivered the highest currency-adjusted total returns for US dollar and Euro investors during the 2016-2018 period. In keeping with currency depreciation, Pound investors (those already invested in the market) achieved slightly higher returns in most overseas markets during the 2016-2018 period. On the other hand, international investors buying real estate in the United Kingdom three years ago may have recorded losses on paper.

Table 1: Historical annual average returns in 21 office markets from 2016-2018Source: JLL Research, Oxford Economics, 1Q 2019
Notes: Returns for non-leveraged investors with no currency hedging.
Historical returns for all markets are based on yields and capital values calculated by JLL
in order to provide a consistent methodology/universe in data for international comparisons.

Outlook for cross-border investors in offices

JLL expects total returns in most Asia Pacific real estate markets to remain attractive to international investors in the next three years.

On a three-year time horizon, JLL forecasts the highest annual total returns denominated in local currency to come from Singapore (12% p.a.), followed by Tier 1 cities in China and India…

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International schools in Thailand has exceeded 200 making it the country with the third-highest number in Southeast Asia as of 2018, according to research by International School Consultancy (ISC). This is in response to the rising demand from Thai parents who seek culturally diverse environments for their kids.

Apart from local demand, there is also a growing number of international students from neighbouring countries who choose to study in Thailand due to lower tuition fees and cost of living.

As a result of the healthy growth in demand for bilingual education, we have seen more and more property developers integrate international schools as part of their mixed-use developments to offer the ‘Live-Work-Play’ lifestyle to all family members from different countries and generations in one place.

Developers see potential in new international schools openings

Developers see the potential in international schools as a critical element in their mixed-use compounds in generating demand for residential properties and increasing the value of nearby developments.

In the past, we have seen successful mixed-use developments such as Sansiri’s T77 Community in soi Sukhumvit 77 comprising multiple residential projects, a community mall, and Bangkok International Preparatory & Secondary School.

Subsequently, Sansiri launched Kawa Haus, a new low-rise residential development, after the opening of Bangkok Prep School at the end of 2017, which is currently under construction and is expected to be completed by the end of 2020.

The condominium project was launched at an average asking price of THB 150,000 per square metre making it relatively higher than nearby comparable projects outside of the T77 Community.

U City has also announced a joint venture with a Hong Kong-based private investor to develop VERSO International School near Thana City Golf and Country Club with a maximum capacity of 1,800 students.

The construction of the school started in 2017 on a 109.8-rai site with a project value of THB 3.1 billion and is expected to be completed by the end of 2021.

At the beginning of 2019, Country Group Development also revealed a business plan for a new mixed-use development combining residential towers and a first-tier international school on a 23-rai site at Rama III – Industrial Ring road.

The international school project will be developed on a 16-rai site with a maximum capacity of 1,750 students. The construction is expected to be completed by 2023.

Moving forward, the international school market in Bangkok will become increasingly competitive as property developers start investing in this sector.

We may see more international schools inside the compounds and part of future mixed-use developments, most likely inside those that have plenty of land area, as international schools not only create a sense of community but also increase the value of nearby developments from both local and international demand with high purchasing power.

An article written by Onchanok Nawapruek, an analyst at Research and Consulting, CBRE Thailand for Bangkok Post dated 10 July 2019.

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Advances in technology, a more mobile workforce, and unpredictable economic growth are starting to reshape the business environment and transform occupiers’ approach to office space decisions. 

In the Bangkok office market, a traditional three-year lease with options to renew and the tenant fitting out the space remains the typical way of leasing office premises for most occupiers. Multinational firms, however, with offices in different countries, are increasingly looking for flexible lease terms as real estate costs continue to be one of their major concerns.

Companies are also looking at agile working where staff no longer have allocated desks and, in some cases, it is easier to get third parties to design, build, and operate this space rather than companies doing it themselves.

Some of the current pricing being offered by coworking space operators is very competitive and the cost combined with flexibility is making leasing from third parties more attractive than companies leasing space, fitting them out, and managing their own premises.

In Bangkok, coworking space has continued to be an emerging source of office demand and CBRE has leased over 44,000 sq. m., accounting for around 25% of CBRE’s total new office letting volume in the last 2 years, to coworking space operators.

International operators like JustCo, WeWork, Spaces, and The Great Room have opened multiple centres over the recent year some of which are scheduled to open this year. The aim of these operators is to revolutionize the way occupiers source office accommodation. They want to provide office space as a service rather than a traditional lease.

Not just targeting startups companies

CBRE believes that coworking space operators are not just targeting startups companies but also multinational firms especially those seeking to build more flexibility into their real estate portfolio. The use of coworking space can provide flexibility for companies to accommodate fluctuation in space requirements.

Accounting rules have changed and rent payable under leases must now go on the balance sheet, whereas it appears that sourcing office space as a service does not count as a lease and therefore need not be on the balance sheet.

This means occupiers do not need to commit to a traditional three-year lease term. Instead, they are paying their rental as a service fee on a per desk or membership basis rather than per square metre. Coworking space operators are also providing tailor-made solutions with companies enjoying exclusive use of the space and not sharing it with others, making this a viable alternative to a traditional lease for large local and multinational companies.

As millennials will become the largest generation within the workforce in the future, CBRE foresees that companies are forced to re-think their workplace quality to make it capable of encouraging collaboration and innovation as well as promoting employee wellbeing.

More companies will transform their offices into agile workplaces either doing it themselves or relying on a coworking space operator to provide the solution.

Although, coworking space operators are now one of the largest sources of demand for office space around the world, depending on the size, they are effectively competing with their landlords for similar tenants. As new coworking space is fitted out and comes onto the market this competition will increase.

Coworking space operators complement the space provided by landlords by appealing to tenants that would not take a traditional lease and the competition occurs for larger tenants who are increasingly comparing both options when they decide to take new premises.

An article written by Pobporn Svetasobhana, a senior analyst at Research and Consulting, CBRE Thailand for Bangkok Post dated 28 May 2019.

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The company is focused on penetrating the Rangsit area for the first time, kicking off with “Common TU” a new premium high-rise condominium which recently received EIA approval.

The Creators HQ has invested as much as 1.5 billion baht to build a premium condominium under the “Common TU” brand as it enters the Rangsit area for the first time.

The company delivers the concept that will make you ‘Live Everyday on the Top’ by creating a ‘Casual Luxury Ecosystem,’ this is a new full-service experience that will enhance the lifestyle of residents and directly benefit the community. Units in “ Common TU” range from 26 to 51 square meters with prices starting at 2. 2 million baht. These units, according to the developer, are ideal for students in the Rangsit area and are also a profitable opportunity for property investors.

Unit owners can expect capital gains of up to 6-10%  with a 4-6% return on rent. The Creators HQ is completely confident that “Common TU” will achieve its sales target of 100% within 3 months.

Bangkok, 13 June 2019 – Mr. Chaiwat Jaktae, Managing Director of The Creators HQ Co. , Ltd. ,  a leading company that specializes in the development of luxury residential property with attractive investment opportunity said, “Common TU is our first foray into the new premium high-rise condominium segment in the Rangsit area following the success of our ‘ Conner Ratchthewi’ project which sold 75% of its units within 3 months. 

This time, the Creators HQ chose the golden location of Rangsit as our ‘beachhead’ in outer Bangkok as it is an attractive location for investors. The location is excellent in terms of ease of travel to the country’ s northern, northeastern, and eastern regions, including close proximity to leading universities such as Thammasat University- Rangsit Campus, Bangkok University ( Rangsit Campus) , and Rangsit University as well as major department stores and numerous industrial estates.”

“Our decision is also in line with the new city plan designed to improve and expand linkage of new towns with large urban centres which will continue its growth and expansion in the Rangsit area with upcoming projects such as the renovation of Future Park Rangsit (one of Asia’ s largest malls) , the development of Central M in a 600- Rai plot by CPN Group as well as the joint venture between Thailand and Sweden to develop MEGA Rangsit in an area of 1,000 Rai set to become a new town, and so much more.”

“ Moreover, the construction of new mass- transit lines linking both greater and outer Bangkok, such as the SRT Dark Red Line along the northern railway line that runs from the center of Bangkok and the Bang Sue Central Station heading to the Rangsit area with the extension project to Thammasat ( Rangsit Center) Station and Chiang Rak Station, will make it even more convenient to access the city center and CBD areas with an expected completion in 2022. Other anticipated projects include the high- speed railway and new motorway – the route through the Rangsit area and Phase 3 of Don Mueang Airport, including other facilities which meet the needs of living in the new city.”

“All this enables the Rangsit area to attract endless economic growth as well as allows The Creators HQ to provide added value for  students,  professors,  white- collar  employees,  and  a  large  majority  of  the  population to  buy  or  rent  a condominium unit. 

We believe that investment in Common TU represents an important opportunity for property investors at it will allow them the opportunity to diversify their investment portfolio and create returns with a low level of risk. We are fully confident that Common TU will not only meet the needs but also exceed the expectations of our target group.”…

Nine years after their construction had started, the two extensions of the MRT Dark Blue Line have finally set the dates for their first test runs.

The opening of these extensions will make the Dark Blue Line the first circular line in Bangkok. This will make Bangkok a more connected city, opening new opportunities for development.

At present, the MRT Dark Blue Line is the second most popular mass transit line in Bangkok with 19 trains carrying 350,000 passengers per weekday.

CBRE believes that the number of its passengers will continue to grow as the line extends and more trains are introduced into the system.

Last year, Bangkok Expressway and Metro Plc (BEM) had signed a contract to buy 35 more trains which will be gradually added into the system, increasing from 19 trains to 54 trains.

By the end of 2019, four new trains will be added into the system when the first extension from Hua Lamphong to Lak Song is opened, increasing the capacity to more than 400,000 passengers per weekday.

Once the second extension from Tao Poon to Tha Phra is operational in 2020, eight more trains are scheduled to be added into the system, increasing the capacity to 600,000 passengers per weekday.

Within the next five years, five under construction lines, connecting midtown and suburban areas of Bangkok to the MRT Dark Blue Line, will be completed.

These five under construction lines include the BTS Light Green Line (Mo Chit – Khu Khot), the Yellow Line (Lat Phrao – Samrong), the Light Red Line (Taling Chan – Bang Sue), the Dark Red line (Bang Sue – Rangsit), and the Orange line (Thailand Cultural Centre – Minburi), of which the first four lines are expected to be completed in 2021 and the Orange line is expected to be completed in 2024.

The completion of these five future mass transit lines will feed more passengers to the MRT Dark Blue Line while creating new nodes at interchange stations; namely, Bang Sue, Lat Phrao, and Thailand Cultural Centre stations where some developers have already planned to develop large-scale developments.

When all the five future lines are operational and planned large-scale developments are completed, all of the 35 new trains will need to be added into the system to match the increasing demand. With a total of 54 trains, the MRT Dark Blue Line will be able to handle nearly 1 million passengers per weekday, nearly tripling the current capacity.

Demand from this one million people will drive emergence of new CBDs and key areas, especially at interchange stations, which will give valuable opportunities for property developments in the near future.

CBRE believes that the expansion of the mass transit network will change how Bangkokians live, work and play and Bangkok will become a more defined city with each corner of the city connected to another by at least one mass transit line.

An article written by Pakapon Utaobin, an analyst at Research and Consulting, CBRE Thailand for Bangkok Post dated 26 June 2019.

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The retail industry is undergoing one of the most profound periods of technological transformation in history.

The evolving retail landscape and consumers’ changing behaviour has led to the emergence of new retail formats and adoption of new technologies. Traditional retailers are continuously being forced to evolve and invest in digital transformation. 

The growing future supply in Bangkok will put more pressure on older centres to renovate and upgrade in order to remain competitive

As of Q1 2019, the total retail supply in Bangkok was almost 7.8 million square metres according to CBRE Thailand, increasing by 3.70% Y-o-Y. The total new retail supply in the whole year 2019 will be one third higher than total new supply last year.

And by the end of 2021, we expect that the total retail supply will exceed 8 million square metres, with the majority of the increase being in large mixed-use developments in the downtown area. 

To survive, big retail players are venturing into new retail formats such as mixed-use development and outlet malls to diversify their portfolio. However, smaller players who are unable to reinvent themselves have been struggling.

E-commerce is having a significant influence on consumers’ behaviour

The impact is increasing as it provides the consumer with choices and convenience which malls cannot fulfil. According to the Electronic Transactions Development Agency (ETDA), the value of Thai e-commerce grew by 14% in 2018 to about THB 3.2 trillion and the growth is expected to reach 20% this year. While the retail sales only grew by 3-4% Y-o-Y. 

According to Ministry of Digital Economy and Society, Thailand’s digital economy will play a critical role in every industry and is expected to reach 25% of total GDP by 2027. The country’s four largest banks have all dropped digital transaction fees since April last year to retain retail customers. 

Customers are more demanding than ever, forcing retailers to invest heavily in digital transformation. According to Gartner, global retail tech spending will increase by 3.65%, to USD 203.6 billion this year. Leading Thai retail players are shifting investments towards (1) Data analytics (2) Omnichannel (3) Artificial Intelligence (4) Digitalised in-store experience and (5) Personalisation/Customization. 

Thai retail giant like the Central Group are focusing on building cloud-based consumer data, personalized loyalty platforms and omnichannel experiences.

While 7-Eleven who just expanded to over 11,000 stores, have been expanding into banking and embracing artificial intelligence to gain customer insights and create personalized in-store experiences.

Globally, China’s largest tech giants, Alibaba and Tencent, have been spending billions of dollars on an omnichannel ecosystem to create seamless a customer journey across online and offline channels.

Despite the surge in e-commerce and other technology, the majority of consumers still value the personal experience in a physical store

A study conducted by IBM and the National Retail Federation validates that 98% of Gen-Z shoppers still prefer to make their purchase in bricks-and-mortar stores. Another recent Retail Customer Research by Accenture also found that by 2020, there will be Gen-Z population of 2.56 billion and 98% will own a smartphone.

This means retailers need to constantly adopt new technologies and innovative strategies for both online and offline channels to remain relevant to ever-changing consumer demand. The retail industry is signalling a tipping point where retailers must reinvent themselves to survive. The wining retailers are the ones who are ready to move away from the…

The top residential and commercial real estate news of the week – 24 June 2019

NCC counts on stopgap events hall
Bangkok Post
NCC Management & Development, the venue management firm and operator of Queen Sirikit National Convention Center, expects a new convention hall at Samyan Mitrtown to offset income lost while rebuilding QSNCC.

Property Perfect sells over 50% of YU Kiroro
Bangkok Post
Property Perfect showcases the sale of its first condominium project in Japan, “Yu Kiroro”, marking the milestone sales of 1.8 billion baht, or over 50% of available units.

Building for a rapidly changing society

The Nation
Homebuyers are changing their purchase behaviour, demanding that residential buildings be designed with the facilities to serve people of multiple generations, especially innovations…

Building to a slowdown
Bangkok Post
The Thai property market is expected to continue slowing in the remaining months of the year, weighed by the global economic slowdown, the escalating US-China trade war…

Ideas 1606 taps beachfront demand with Natai villas
Bangkok Post
Demand for luxury villas in beach destinations from Thai business owners remains strong despite unfavourable sentiment as they take advantage of low interest rates.

Agencies push Pattaya as Mice centre
Bangkok Post
The Thailand Convention and Exhibition Bureau (TCEB) has joined with the Eastern Economic Corridor (EEC) Office and Pattaya City to develop the resort destination into a “Mice Metropolis”.

Blue Line impact growing
Bangkok Post
The extended MRT system will ultimately carry 1 million passengers per day, creating new development opportunities.

FTI seeks measures to rein in baht

Bangkok Post
The Federation of Thai Industries (FTI) is calling on the Bank of Thailand to launch new measures to rein in the baht’s rapid gains after the currency hit a more than six-year high, aiming to prevent the export slump from deepening.

Rail, port winners to ink contracts in July

Bangkok Post
The high-speed rail project linking Suvarnabhumi, Don Mueang and U-tapao airports and the third phase of Map Ta Phut port worth a combined 271 billion baht.

AoT seeks govt’s nod for B202bn plan to build new airports
Bangkok Post
Airports of Thailand Plc (AoT) will ask the new government to approve its 202-billion-baht development plan, including investing in new airports in Phuket and Chiang Mai.

Small hotels set to legalise ventures
Bangkok Post
Some 5,000 non-registered small hotels are expected to legalise their business after a recent order issued by the National Council for Peace and Order (NCPO).

New mortgages slipping
Bangkok Post
The number of new mortgage borrowers sank 8% year-on-year in April after the launch of loan-to-value (LTV) curbs at the start of that month, says a senior official at the Bank of Thailand.

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We recently launched the 10^th edition of our Global Real Estate Transparency Index, a leading publication that has been charting the progression of transparency across the world for two decades.

The 2018 Index builds upon the strong track record of our previous surveys, evolving to meet ever-changing demands, and now covering 100 countries and 158 city markets.

We have observed a lot of change in the last 20 years and transparency has become ever more paramount.

We have experienced a global financial crisis that put a spotlight on debt and regulation, witnessed the emergence of new technologies that have the potential to disrupt our industry, and here in Asia Pacific, we have seen more than 700 million new people living in cities which necessitated the need for higher quality real estate and supporting services.

Emerging markets in South and Southeast Asia that led the way in transparency gains in the 2018 Index

Encouragingly, Asia Pacific has made positive strides throughout this period and in the 2018 survey, it recorded the biggest improvement of the four major regions globally.

There is growing recognition by governments, occupiers and investors that transparency is necessary for an efficient real estate market. It can help fuel economic activity and build community well-being, which has led to new reforms and greater market intelligence.

Taiwan is a good example, where government initiatives such as the Real Estate Tax Declaration platform are continuing to increase the availability and quality of real estate data, and leading to steadily improving transparency.

Myanmar was the biggest improver in the region and globally

Remarkably, it was emerging markets in South and Southeast Asia that led the way in transparency gains in the 2018 Index.

Myanmar was the biggest improver in the region and globally, benefitting from initiatives to open up its economy, which also increased foreign investor interest. India was another striking story, where the introduction and implementation of the Real Estate Regulatory Act, and removal of roadblocks related to the REIT industry, were instrumental in progressing the government’s agenda to reduce corruption and improve transparency.

It is interesting to note that recent news articles are speculating that Blackstone and Embassy Group will file a prospectus for a REIT IPO soon, which would be a first for the country and will surely be another positive step in its move up the transparency ladder.

Thailand and Vietnam also made solid gains, almost reaching the next transparency tier, while more regulatory scrutiny in Macau helped pushed it into the “Semi-transparent” tier.

Although emerging markets saw the greatest momentum, mature economies also took positive steps forward, with Australia and New Zealand remaining the standard-bearers for transparency and maintaining their spots near the top of the global rankings.

South Korea moved into the “Transparent” tier as heightened investor interest supported improved market coverage by information providers. The continued implementation of a carbon trading scheme was also a positive step on the sustainability front, an area lacking across…

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Bangkok office supply totaled 8.95 million square metres at the end of Q1 2019, increasing by 1.9% Y-o-Y, according to CBRE Research.

Three office buildings were completed with a combined net area of 78,000 sq. m.; True Digital Park, MS Siam Tower, and Ladprao Hills.

The overall vacancy rate increased from 6.6% in the previous quarter to 7.5% in Q1 2019. The total net take-up (growth in total occupied space) was at 41,000 sq. m., decreasing by 36.1% Y-o-Y.

Future office supply continued to rise in Q1 2019 with construction starting on six more projects. Around one million sq. m. of new office space was under construction, increasing from 0.87 million sq. m. the previous quarter. This new space will be completed between Q2 2019 and 2022.

About 60% of total space under construction in Bangkok will be Grade A office space for rent in the CBD including Mitrtown Office Tower, The PARQ (Phase 1), Vanissa Building, the Unicorn, O-NES Tower, EmSphere, One City Centre, and the first phase of One Bangkok.

With around 1.2 million sq. m. of office space still at the planning stage where sites have been acquired, CBRE expects to see more construction starts. This will increase the projection of future supply beyond 2021.

Although there is a lot of space under construction, most of it will be completed after 2021, meaning options will remain limited between 2019 and 2020. Mitrtown Office Tower and the PARQ (Phase 1) will be the only two Grade A office buildings in the core CBD due for completion in 2019 and 2020, respectively.

“Tenants who need space during this period will need to plan ahead because of limited choices” says Ms. Roongrat Veeraparkkaroon, Head of Advisory & Transaction Services – Office at CBRE Thailand.

By 2022 the total supply is expected to reach 10 million sq. m.

The overall office market is likely to change with new supply exceeding CBRE’s forecasted demand due to the amount of new buildings being completed during this period.

Meanwhile, vacancy is expected to rise in old buildings which may force the landlords to offer attractive rents and improve the quality of their space in order to retain or attract new tenants.

The population density of office buildings will be higher because of agile working hence buildings will need to have the lift capacity to deal with the volume of traffic. Agile working is where employees do not have allocated desks.

More people per floor will require more sophisticated air-conditioning systems to keep constant temperature in all working areas and there will need to be better thermal insulation. The greater population will also mean that tenants will consider if there are enough washrooms. Tenants are also demanding better supporting amenities in buildings. This will be a major challenge for older buildings thereby making it harder to retain the best quality tenants.

Looking forward, CBRE believes more tenants will move to agile workplaces which means they will require less space but pay more rent per square metre as they will need good quality buildings.

The key question is how many companies are willing to pay significantly higher rents to get top quality premises which will depend on the rental gap between new Grade A and older Grade A and B buildings. If the premium for the best quality buildings is significantly higher than older buildings, it may be difficult for tenants to get approval for an increased rental budget.

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The rise of flexible space in Asia Pacific has been meteoric. JLL research indicates major operators grew their footprint at an annualized rate of 35% over the 2014-2017 period and that pace of growth has carried over into 2018 (Figure 1).

Figure 1: Flexible space stock*
Source: JLL Research

A number of factors have driven the growth of this industry, and the co-working segment in particular, including the flexible terms offered to members, the plug and play ease of setting up, the sense of community and ready access to social and professional networks.

Initially co-working appealed to startups who found it more affordable than opening a traditional office.

But increasingly large corporates have started including co-working in their real estate strategy. And to accommodate corporates, operators have increased the size of their centres – our latest research indicates the average flexible space lease grew nearly 40% in 2016 (Figure 2). That momentum has slowed somewhat but centres have continued to grow.

Figure 2: Average flexible space lease*
Source: JLL Research

Catering to corporates with larger centres enables operators to stabilize their rental income (providing much needed comfort to landlords and investors), but it also means heavier rent obligations and larger expenditure on fit out. As a result operators have been chasing additional funding from investors and exploring alternative business models.

Alternatives to standard leasing

To date the most popular flexible space model has been rent arbitrage.

Essentially, operators charge higher rents per unit basis to their members than the rent they pay to landlords. To achieve this, operators typically have seat densities much higher than a traditional office. However, as more operators have entered the market, competition has intensified and arbitrage margins have come under pressure.

Base or turnover rent, a popular retail lease structure, is one alternative. Tenants pay either a fixed base rent or a percentage of sales, whichever is greater. Such a model provides lower fixed rents than market but aligns the upside when centres perform well.

The management contract, popular in the hotel industry, is another alternative. Here, the operator charges a percentage of total revenues and/or gross operating profit for branding and operating the premises and typically there is no lease obligation for the operator. As with hotels the primary upside and downside is with the owner of the property who is dependent on the operator to keep occupancy and profitability high. Operators have limited obligations compared to other models and yet they are still incentivised to maximize profitability.

While these alternatives offer operators a means to better withstand a market downturn, they will have a direct impact on how investors view the cash flows from a commercial asset.

Going forward, the ability of the operator to demonstrate profitability above and beyond a traditional rental model will determine whether alternative models…

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