High LeveragePersistently high leverage leaves the REIT exposed to interest-rate rises and refinancing risk. Over months this constrains financial flexibility, raises interest costs, and can materially reduce distributable cash in a higher-rate or tighter credit environment.
Margin CompressionDeclining gross and net margins point to structural pressure from higher costs or rental pricing limits. If sustained, margin compression erodes cash available for dividends and capex, reduces the cushion versus cyclical downturns, and limits reinvestment capacity.
Weak Cash ConversionA low operating-cash-to-net-income ratio indicates earnings are not fully converting to cash, raising risk to distribution sustainability and debt servicing. Even with positive free cash flow growth, poor cash conversion can force reliance on asset sales or new borrowing.