Why Service Properties Trust Stock Rose as Much as 12.5% on June 29

Real estate investment trust (REIT) Service Properties Trust (NASDAQ: SVC) rose an impressive 12.5% at one point on Monday. At 3:25 p.m. EDT, however, they had given back some of that advance and were sitting with a 9.6% gain. There wasn't any specific news from Service Properties, but one of its largest tenants did provide an interesting update.

Service Properties operates using a net lease model, meaning its lessees are responsible for most of the costs of the properties they occupy. That said, the company has been severely impacted by the COVID-19 health crisis, since it is heavily invested in hotels and highway travel centers (effectively, truck stops). When economic activity and travel slowed to a crawl because people were staying home and most non-essential businesses had closed their doors, both classes of its clients got hit hard. In April, for example, the REIT only collected 45% or so of its contracted rents.

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Source Fool.com