In upgrading its outlook from "stable" to "positive and raffirming its triple-"B" corporate credit rating, S&P described the West Coast focused office and industrial trust one of "the most solid real estate companies within its rating category," noting its 41 million-sf portfolio with a market capitalization of about $6 billion.

The kudos are based in part on Spieker's substantial West Coast inroads, particularly in the ultratight Bay Area market: "This focus provides for a commanding market presence and good asset quality," if not a very geographically diverse one, states S&P in it's report.

The San Francisco/Bay area markets alone contribute a substantial 48% of the trust's total net operating income, according to the report. In addition, the trust has become "increasingly dependent" upon the high-growth technology sector, which currently generates about 24% of the company's revenues. "Spieker does have an excellent track record in this market, however, and the dispersion of properties throughout local submarkets (Silicon Valley, East Bay, Peninsula) also helps to balance this concentration," the report concludes.

Spieker's financial flexibility and moderate risk were also cited as reasons for the change in outlook. S&P said the firm's debt-to-capitalization was about 50% on a book-value basis and 35% on a market-value basis. Coverage measures and cash-flow protection were also expected to remain positive, the latter due largely to significant rent growth in Spieker's portfolio and a low vacancy rate of 96%. Moreover, states the report, the firm's financial flexibility will continue to serve it in good stead even after the Silicon Valley rental market eventually weakens.

The news sent the company's stock up $1.375 to $56.347 by close of markets Thursday, 65 cents below its 52-week high.