Fitch: U.S. Equity REIT Liquidity Shows Modest Improvement

NEW YORK--()--Sector-wide liquidity coverage is showing improvement for U.S. equity REITs, according to Fitch Ratings.

The median liquidity coverage ratio for select U.S. equity REITs is 1.6x for the Oct. 1, 2015-Dec. 31, 2017 period, compared to 1.4x for the same period last year. Coverage for four of the five major property types improved from the prior comparable timeframe, with retail the lone exception. 'Record REIT unsecured bond issuance, including private placements, is bolstering liquidity,' said Managing Director Steven Marks.

Despite these positive elements, the public unsecured bond market has become choppier in recent months and REITs have responded with a heavier reliance on revolving lines of credit. At Sept. 30, 2015, weighted average outstanding revolver balances were at the highest levels since 2008.

REITs are on an unprecedented pace for asset sales as companies have been forced to use their existing portfolios to fund development and make selective acquisitions. Many REITs are using current market conditions as an opportunity to monetize non-core assets and assets management believes have reached peak earning potential.

The full report '3Q15 U.S. Equity REIT Liquidity Update: Modest Improvement', is available at 'www.fitchratings.com'.

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

3Q15 US Equity REIT Liquidity Report: Modest Improvement

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=874293

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Contacts

Fitch Ratings
Zachary Klein
Associate Analyst
+1-212-908-0841
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Steven Marks
Managing Director
+1-212-908-9161
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Zachary Klein
Associate Analyst
+1-212-908-0841
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Steven Marks
Managing Director
+1-212-908-9161
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com