Heritage's increased size, larger portfolio, strong institutional sponsorship with the New England Teamster and Trucking Industry Pension Fund and Prudential Insurance, which own the majority of its preferred and common stock, should help to support its long-term growth, Moody's noted. But, post-merger integration risks, its multiple market expansion strategy and challenges in the retail industry pose risks.
Other factors that influenced the rating are Heritage's complex organizational and legal structure, its need to combine operating and accounting systems and its limited operating history as a REIT. Although senior management is experienced and knowledgeable, according to Moody's, it has not been together for very long and has yet to demonstrate its ability to add value to a large, diverse property portfolio.
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