AFR specializes in purchasing bank branches and office buildings, primarily under sale/leaseback agreements. Because of its specialty, several of its underwriters, including Wachovia and Bank of America, are current tenants. They and others are also potential customers.

The REIT has publicly stated that a portion of the proceeds from the IPO will be used to acquire additional properties.

In an unrelated matter, Fitch Ratings commented on the planned merger of Philadelphia-based Pennsylvania Real Estate Investment Trust and Crown American Realty Trust. Fitch maintains a B+ rating on Crown American's $124 million 11% redeemable preferred stock with a stable rating outlook. It does not maintain a rating on PREIT, but said it views the announced transaction as "a likely credit neutral event."

Fitch said it is working with PREIT management to establish a rating for the merged entity. Meanwhile, the rating company referred to potential strengths of the merger, such as "more than doubled market capitalization with reduced insider ownership that will improve capital markets liquidity," and "an increased operating platform that with improve negotiating leverage with tenants." Fitch also credited the PREIT senior management team with "a track record of successfully redeveloping and repositioning assets."

At the same time, Fitch cited concerns over "the level of integration risk incumbent in the transaction, which is further compounded by PREIT's recent shift in fundamental investment strategy." This refers to PREIT's divestiture of multifamily properties to focus exclusively on retail properties.

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