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Fitch Downgrades REITs on Refinancing Concerns

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Fitch Ratings lowered its industrywide outlook for commercial real estate owners Wednesday, citing a worsening economic outlook and tight credit markets.

The rating agency downgraded its outlook for the real estate investment trust sector to negative from stable. The report applies to equity REITs, which invest in shopping malls, office buildings and other properties.

These companies "are situated at the nexus of a recessionary economy, weakening property fundamentals, near-frozen debt capital markets, and stock prices that are, on average, approximately 60 percent below their peak level," wrote Fitch analyst Steven Marks.

The report came after Fitch on Tuesday downgraded General Growth Properties Inc.'s credit ratings, saying default may be imminent for the Chicago-based shopping mall owner.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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