Profile Home | Media | Favorites | Playlists | Friends | Groups | Blogs | Picture Gallery | Comments | Subscribers

 

Overseas deficit woes and escalating tensions in jimmy choothe Middle East have pulled the plug on a spirited rally of real estate investment trusts. Still, the sector's fundamentals are improving enough to merit an outlook upgrade to stable from Fitch Ratings. The ratings agency says in its midyear outlook report that better access to capital markets, robust liquidity and a nascent economic recovery in the U.S. prompted the upgrade from negative. "As such, Fitch will likely affirm ratings on the vast majority of its rated REITs in the coming months. However, rating upgrades may be in store for REITs that delever more aggressively and maintain strong occupancy and net operating income," said Steven Marks, managing director and U.S. REIT group head. The agency said REITs still face weak property level fundamentals that are likely to decline further for the remainder of theyear. "High leverage, increased use of secured debt and more speculative development pipelines may leave some REITs vulnerable to downgrades," said Marks. Fitch said it will maintain stable outlooks on all the major property types for rest of the year except for industrial REITs, citing pressure on property cash flows and relatively high leverage. Among Fitch's concerns are elevated losses from consumer loan juicy couture handbags portfolios and higher losses anticipated in commercial real estate portfolios. However, a mitigating factor is that as a result of the credit crisis, financial institutions "have built substantial loan loss reserves" and increased capital levels, Fitch said.

The improved outlook on the sector comes at a fitchtime when REIT stocks are being pulled lower by the broader equity market concerns over financial and economic problems in Europe as well as fallout from Israel's actions aboard aid ships bound for Gaza. Fitch says the property is in above-average condition and well-maintained with ample parking. Three strip centers and a free-standing building that is tenanted by Wachovia Bank under a ground lease make up the site, with the two collateral anchors being Office Depot and Party City. The two shadow anchors, Target and Costco, share a contiguous parking lot with the collateral property.Fitch did a site inspection on the property on a Tuesday afternoon around 4 pm. The shadow anchors had average traffic, with Costco experiencing the most foot traffic. The tenant mix, which includes fast-food restaurants and a 7-11 with a gas station, experienced minimal foot traffic. Most of the cars appeared to belong to staff of the in-line tenants and anchors, likely because of time of day. The tiffany jewellerycollateral is fronted on Highway 50 by a Residence Inn and Extended Stay America and several restaurant chains that are not part of the shopping center.

The Dow Jones Equity All REIT Index fell 6.43% this nfl jerseyspast week and 5.7% last month. Reit stocks, up 3.8% since the beginning of the year, are still outpacing the broader equity market as the S&P 500 has declined 5% year-to-date. The stocks of real-estate investment trusts had been rising since hitting a bottom in March 2009, largely because investors are banking on a strong recovery in commercial real estate in 2011. The market was also helped by the larger REITs raising large amounts of equity and refinancing their debt. Several in-line tenants at Chantilly Crossing have leases that contain co-tenancy clauses with the center's shadow anchors, Target and Costco. Both of these shadow anchors own these stores and have been in place since the property was built in 2003.There are several other shopping centers in the area, including centers located closer to I-66, the main east/west thoroughfare between Washington, D.C. and Northern Virginia. The subject property's shadow anchors have additional locations within the Northern Wholesale JewelryVirginia corridor as well.As new U.S. structured finance transactions begin to emerge, Fitch Ratings has enhanced its presale reports for new CMBS transactions. The reports provide key rating drivers and in-depth analytical notes and commentary on cash flow analysis and site inspections.