STOR Capital CEO Christopher H. Volk sent a letter to shareholders this week to address concerns over the potential impact of the coronavirus on the REITs’ property portfolio.

STOR has investments in more than 2,500 property locations and 478 tenants. As investors bailed on REITs the persistent selling pressure forced some second wave selling from REIT exchange-traded funds, STOR has seen its share price decline by more than 50% in the past month.

STOR Capital on Coronavirus

Many of STOR’s locations are standalone restaurants, and they will feel enormous pressure if the coronavirus is not contained or slowed soon.

Mr. Volk reassured investors that the portfolio was deeply diversified, telling us that “STORE intentionally has a highly diverse investment portfolio. Over 75% of our rents are derived from tenants that represent less than 1% of our rents. Our investments are also spread across 112 industries. Geographically, our investments are spread across 49 states, with most of our assets centered in suburban marketplaces. While it is too early to say for sure, my personal opinion is that such markets, which afford customers better opportunities for plentiful “social distancing,” may be less impacted by the COVID-19 virus than more urban markets.”

He also reminded his investors that STOR was in fantastic shape so far as liquidity and balance sheet concerns. He wrote, “STORE concluded 2019 with nearly $100 million in cash and an unused $600 million fully committed line of credit. In January, we addressed our equity capital needs for the quarter by issuing approximately $150 million in new shares at a weighted average share price of $36. At the time we did this, we knew that this large of an issuance would exact a small toll on our AFFO mark for the year. However, taken in hindsight, this move now appears to have been very wise.”

He also addresses the dividend in light of growing concerns about divided cuts across the REIT sector, saying, “STORE has had a well-protected dividend from our earliest days as a public company. Today, our dividend is enviably among the most protected among our peer set and provides STORE with margins of safety that are valuable at volatile and uncertain times like this

Until the current REIT meltdown, STOR had been a top-performing REIT with adjusted funds from operations growth averaging 43% a year. The high-quality portfolio of net lease properties attracted the attention of Warren Buffet, whose Berkshire Hathaway (BRK-A) owns 8.2% of STOR Capital right now

You can read the full letter here.