THE manager of Manulife US Real Estate Investment Trust (Reit) said it was “surprised” by the sharp decline in portfolio valuations that caused a breach of loan covenants, potentially affecting distributions.

“We were surprised at how deeply they had come down,” said Tripp Gantt, chief executive of the manager at a briefing on Tuesday (Jul 18), after it announced that the Reit’s real estate portfolio valuation had declined by 14.6 per cent to US$1.6 billion as at June 30, 2023.

“The different indices that we were looking at, the different information sources we were looking at to kind of gauge where we were in terms of valuations were mixed, but none of them pointed to where our valuation declines would be at mid-year,” he added.