Volatile Multi-year Earnings Track RecordThe company’s earnings have swung from deep losses to a recent profit, showing sensitivity to leasing conditions, valuation swings or one-offs. That volatility weakens predictability of rental income and makes forecasting cash available for reinvestment or distributions less reliable.
Weak Cash Conversion Versus EBITDAPoor cash conversion means reported EBITDA overstates free cash generation; the gap forces greater reliance on working capital adjustments or financing to fund maintenance, capex and debt. For a REIT, low cash conversion raises operational and liquidity risk.
Recent Step-up In Leverage Reduces FlexibilityHigher indebtedness narrows financial flexibility and raises exposure to interest-rate and refinancing risk. For an office-focused REIT, elevated leverage increases downside if occupancy or rents soften, constraining ability to pursue value-adding repositioning or acquisitions.