Shares of real estate investment trust (REIT) EPR Properties (NYSE:EPR) rose an impressive 51% in November according to data from S&P Global Market Intelligence. That said, even after that massive one-month gain, the stock was still down 50% over the first 11 months of 2020. The story here, tied to the coronavirus pandemic, is familiar, but there are still very troubling issues ahead for EPR Properties.
EPR Properties owns experiential real estate like movie theaters, casinos, and amusement parks, among many other things. The economic shutdowns used to slow the spread of the coronavirus closed many of its lessees down, leading to rent collection issues. In fact, in October the REIT was still only able to collect 43% of the rent it was owed. That's a terrible number and clearly not sustainable long term.
The stock advance, meanwhile, was directly related to upbeat coronavirus vaccine news from Pfizer and BioNTech, AstraZeneca, and Moderna. Buoyed by the medical advances these companies have made, investors bid up the shares of stocks that would benefit from the world getting a handle on the coronavirus, like EPR Properties. Only there's still a long way to go before enough people have been inoculated to have an impact on the trajectory of COVID-19 cases. In the meantime, there's a spike occurring right now that EPR Properties and its tenants still have to get through. And some of the REIT's tenants, notably AMC Entertainment Holdings, are in very troubling financial states.
EPR Properties is only appropriate for more aggressive investors at this point, given its focus on properties that bring people together in groups. Yes, a successful rollout of vaccines will eventually help to alleviate the headwinds it is facing, but that's still months, if not quarters, away. A lot of bad things could still transpire in the meantime.