(The following statement was released by the rating agency)
Link to Fitch Ratings' Report: 2Q16 U.S. Equity REIT Liquidity:
NEW YORK, September 22 (Fitch) Following a difficult few months,
REIT liquidity profiles have improved meaningfully
year-over-year thanks to a
lessons learned approach from previous down cycles, according to
in its latest quarterly update.
Despite current favorable capital market conditions, REITs are
for the eventual market contraction, according to Managing
Marks. 'REITs are adopting a lessons learned approach by
reserves, reducing revolving line of credit balances and
consciously spacing out
debt maturity schedules to prevent any near-term shocks,' said
Early 2016 capital issuance was sluggish but has since recovered
on the back of
strong unsecured bond and common equity issuance since April 1.
liquidity coverage ratio for select U.S. equity REITs is 1.7x
for the July 1,
2016 - Dec. 31, 2018 period as coverage for each major property
20% or more from the prior year.
Equity investors are also realigning their portfolios with REITs
reclassified into a new real estate-only sector under the Global
Classification Standard (GICS), which went into effect at the
end of last month.
The change removes REITs from the Financial Institutions sector,
increasing visibility and likely generalist investment in the
commercial real estate becomes a growing part of a diversified
'2Q16 U.S. Equity REIT Liquidity Update: Clear Route Ahead', is
'www.fitchratings.com' or by clicking on the link.
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Additional information is available at 'www.fitchratings.com'.
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