...Fitch Ratings is downgrading its outlook for the equity REIT sector to negative from stable, and many equity REITs will face cha llenges to maintain current rating levels. Equity REITs 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% below their peak level fr om February 2007. Negative implications for credit quality are pervasive \01 anticipated worsening fixed-charge coverage ratios, more challenged liquidity profiles, softening unencumbered asset coverage metrics, and a difficult asset sales market that hinders REITs ability to reduce leverage and sell weaker-performing assets to recycle capita l to improve overall portfolio quality. Fitch stated in a special report ...
