Moody's Investor Services has been releasing industry outlooks for 2012 across the markets and said that the outlook for the ratings of US real estate investment trusts (REITs) and real estate operating companies (REOCs) is currently stable across all property types. Further, Moody's notes that not only do the sectors currently have stable operating outlooks, but the REITs continue to keep their real estate portfolios well occupied and are outperforming most of the markets in which they operate.
"The REITs continue to successfully navigate through difficult capital market conditions, and they have fewer demands on their liquidity than they did during the recent recession, given that their debt maturities are staggered, development pipelines at low levels, and their bank facilities have significant capacity," says Philip Kibel, a Moody's Senior Vice President. "Further enhancing their financial flexibility is that most investment-grade-rated REITs remain committed to maintaining low dividend payout ratios, that is low dividends relative to the funds available for distribution."
Moody's added that capital markets have stabilized to a point that capital is available to REITs with strong balance sheets, citing several investment-grade REITs in the past two months that successfully tapped the unsecured debt market and issued approximately $3.8 billion in bonds. To read the full outlook report see the Industry Outlook "US REITs and REOCs" on Moodys.com.
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