Fitch: U.S. Equity REITs Continue Proactive Liquidity Management

NEW YORK--()--U.S. equity REITs have been active thus far in 2015 in both the credit and equity markets, according to Fitch Ratings' latest REIT Liquidity Update. This has enabled liquidity management for the sector despite the recent decline of stock price premiums to net asset value to well below the nearly 20% premiums achieved in mid-2014.

The median liquidity coverage ratio for select U.S. equity REITs is 1.6x for the Jan. 1, 2015 to Dec. 31, 2016 period, down slightly from 1.7x the prior year. Healthcare continues to outpace the other property sectors, due in part to low projected capital expenditures, with a median liquidity ratio of 2.0x.

Over 75% of the 66 issuers analyzed in Fitch's report are well poised to address upcoming maturities and capital expenditures. Revolver utilization ticked up slightly to 15.1% as of Dec. 31, 2014 from 13.6% as of Dec. 31, 2013. Development pipelines are increasing, particularly in the multifamily and industrial sectors, which utilized 18.7% and 29.6% on average, respectively, of their revolving credit facilities as of Dec. 31, 2014.

The only companies with leverage above 7.0x and more than 20% of debt maturing through 2016 are Brixmor Property Group, Inc. and Corporate Office Properties Trust. Brixmor was proactive in January 2015, issuing $700 million senior notes due 2025 and using the proceeds to repay borrowings under its revolving credit facility, and Corporate Office is well poised to address these maturities as evidenced by a comfortable liquidity surplus.

The full report, '4Q14 U.S. Equity REIT Liquidity Update: Match Funding and Liquidity Management Continues', is available at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: Related Research:

--'U.S. Equity REITs and REOCs Ratings Navigator Companion' (February 2015);

--'Fitch Fundamentals Index - U.S. Index Trend Analysis - 4Q14' (January 2015);

--'2015 Outlook: U.S. Equity REITs' (December 2014);

--'U.S. Corporates: Implications of an Interest Rate Shock' (October 2014);

--'Trends in U.S. Equity REITs' Development Pipelines: Activity Accelerates' (October 2014);

--'U.S. Equity REITs: When Dividends Affect Ratings' (September 2014);

--'Global Economic Outlook '(December 2014).

Applicable Criteria and Related Research: 4Q14 U.S. Equity REIT Liquidity Update: Match Funding and Liquidity Management Continues

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863627

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Contacts

Fitch Ratings
Sean Pattap
Senior Director
+1-212-908-0642
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Boris Alishayev
Associate Director
+1-212-612-7880
or
Steven Marks
Managing Director
+1-212-908-9161
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
Email: sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Sean Pattap
Senior Director
+1-212-908-0642
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Boris Alishayev
Associate Director
+1-212-612-7880
or
Steven Marks
Managing Director
+1-212-908-9161
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
Email: sandro.scenga@fitchratings.com