NEW YORK CITY—The outlook for the US REIT sector as a whole has been upgraded to "positive" for 2015, Fitch Ratings says. What the ratings agency terms “secular changes” are responsible for enhancing credit profiles within the sector, and Fitch says it believes they'll be maintained for the foreseeable future.
Specifically, those secular changes include “portfolio focus and tactical diversification, lower risk growth strategies, good liquidity management, minimal share repurchase risk and enhancements to capital access via at-the-market equity programs,” according to the Fitch report, prepared by a team of analysts led by managing director Steven Marks. “All of these elements are currently reflected in Fitch's issuer ratings and Rating Outlooks; in many cases, issuers with Positive Rating Outlooks have embraced many of these credit-enhancing rating drivers.”
Fitch says it's maintaining its “stable” ratings outlook for US equity REITs in the coming year, in view of its expectations for “continued solid liquidity driven by good access to capital, improving property-level fundamentals across nearly all asset classes and lower-risk strategies.” Since 2010, Fitch says, 14% of its rating actions on REITs have been upgrades, 6% were downgrades and the remaining 80% were affirmations. “Upgrades have generally been driven by issuer-specific circumstances, such as deleveraging efforts or improved access to capital, and do not reflect broader cyclical trends within the sector.”
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.