{"id":1004039868,"date":"2012-03-21T12:47:40","date_gmt":"2012-03-21T20:47:40","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004037695"},"modified":"2022-12-09T01:22:23","modified_gmt":"2022-12-09T09:22:23","slug":"equity-reits-off-to-a-running-start-in-2012","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/equity-reits-off-to-a-running-start-in-2012\/","title":{"rendered":"Equity REITs Off to a Running Start in 2012"},"content":{"rendered":"

By Steven Marks, <\/strong>
\nHead of U.S. REITs, Fitch Ratings<\/em>
\n\"\"<\/a><\/p>\n

\u201c2012 may be a pivotal year for the Outlook of U.S. Equity REITs, for better or worse.\u201d Fitch Ratings said this at the start of this year. If the first three months are any indication, equity REITs are certainly in for a markedly better 2012.<\/p>\n

Anchoring the improvements thus far have been multi-family REITs. Fundamentals are continuing to strengthen. Additionally, companies such as BRE Properties and Home Properties have announced meaningful dividend increases, bolstered by increases in portfolio cash flows. Those developments have helped spur positive rating actions of late, with Fitch recently revising the rating outlook on both BRE and Essex Property Trust to Positive from Stable. As such, Fitch remains positive on sector fundamentals for multi-family REITs. However, it is important to note that there have been increases in on-balance-sheet development, which can meaningfully impact the risk profile of issuers.<\/p>\n

Also worth noting is the more optimistic suburban office same-store net operating income projections. This is good news (albeit marginally so) for office REITs with sizeable suburban portfolios like Brandywine, Highwoods and Mack-Cali. That said, the operating environment for office REITs remains challenging<\/p>\n

Another area worth highlighting is one that Fitch alluded to earlier this year:<\/p>\n

\u201cThe days of playing defense may also come to an end for U.S. equity REITs in 2012 with more merger and acquisition activity on the horizon.\u201d<\/p>\n

Late last month, Mid-America Apartment Communities issued 1.7 million shares of common stock. Mid-America said that they intend to use the proceeds to, among other things, partially fund acquisition and development. Fitch views the offering positively because it supports management\u2019s strategy of funding portfolio growth without utilizing much leverage. Whether other REITs follow suit with this strategy or more aggressively add on leverage remains to be seen.<\/p>\n

Looking farther into 2012, the primary outlier for the equity REIT sector remains the direction of the broader economy, the recovery of which is strengthening. Additionally, whether equity REITs continue to exercise fiscal prudence will also help dictate what direction the outlook for the sector heads.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Steven Marks, <\/strong>Head of U.S. REITs, Fitch Ratings<\/em><\/p>\n

At the beginning of the year, Fitch said that 2012 would be pivotal for REITs. Judging by the first three months, things look to be going well for the sector. <\/p>\n","protected":false},"author":1201,"featured_media":1004037407,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1004039868","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nEquity REITs Off to a Running Start in 2012 - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/equity-reits-off-to-a-running-start-in-2012\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Equity REITs Off to a Running Start in 2012\" \/>\n<meta property=\"og:description\" content=\"By Steven Marks, Head of U.S. REITs, Fitch Ratings At the beginning of the year, Fitch said that 2012 would be pivotal for REITs. 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