Elevated LeverageMaterial increase in leverage raises refinancing and interest-rate sensitivity, reducing financial flexibility. Higher debt levels constrain capital allocation options, amplify distribution and growth risk under rising rates, and make the REIT more vulnerable to funding stress.
Low Cash On HandMinimal cash reserves increase reliance on credit facilities for near-term liquidity and capital projects. In stressed markets or if credit availability tightens, this could delay completions, force more expensive financing, or pressure coverage ratios despite committed lines today.
Rising Development CostsHigher per-sq-ft development costs compress expected returns on intensification and retrofit projects, lengthening payback and requiring more capital. Combined with higher interest costs noted elsewhere, this can narrow spreads on new projects and strain coverage and leverage metrics over time.