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6 REIT-owned properties located near Puerto Rico earthquake activity

A sequence of earthquakes off the southern coast of Puerto Rico has caused extensive damage to homes and other buildings in the area. More than 8,000 refugees have fled their homes to nearby government shelters, and many more are camping outside their homes and on sidewalks, according to Puerto Rico's secretary of state, Elmer Román.

The largest earthquake came Jan. 7. With a magnitude of 6.4, it knocked out power across the entire island. A 5.9-magnitude quake followed on Jan. 11. Puerto Rico Gov. Wanda Vázquez declared a state of emergency following the Jan. 7 earthquake, and estimated roughly $110 million in damage at the time.

U.S. equity real estate investment trusts own 67 properties in Puerto Rico, the majority of which are in the eastern half of the island. However, several REIT-owned properties are in the vicinity of Ponce, which is roughly 15 miles from the epicenter of the largest quake.

Global Net Lease owns 18 restaurant properties on the island leased to Encanto Restaurants Inc., two of which are in Ponce. Also in Ponce is Kimco Realty Corp.'s Ponce Towne Center, in which Seritage Growth Properties owns a building leased to Kmart.

Realty Income Corp. also owns four buildings in Puerto Rico leased to AutoZone Inc., with one located in Ponce. VEREIT Inc. owns the 56,500-square-foot General Service Administration office in Ponce, as well as two buildings leased to Walgreens Boots Alliance Inc. located to the east of where the earthquakes struck.

Shopping center REIT Retail Value Inc. owns 13 properties in Puerto Rico, none of which are close to the earthquakes.

According to the U.S. Geological Survey's National Earthquake Information Center's latest forecast issued early Jan. 15, aftershocks are expected in the area over the next week, with roughly 42 to 220 aftershocks of magnitude 3.0 or higher. Magnitude 3.0 earthquakes are large enough to be felt near the earthquake's epicenter, but rarely cause damage. Indoor objects may shake when near a magnitude-3.0 earthquake. The number of aftershocks will drop off over time, though a large aftershock could temporarily increase their frequency.

The agency estimated the chance of an earthquake of magnitude 5.0 or higher to be roughly 56%, while the odds of an earthquake of magnitude 6.0 or higher is 8%.

Magnitude-5.0 earthquakes can cause damage to poorly constructed or older buildings, though most well-constructed buildings would receive only slight or no damage. Magnitude-6.0 earthquakes are much stronger and can cause damage to even well-constructed buildings, and poorly constructed buildings will experience moderate to severe damage.

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