Privately held McLean, Va.-based Capital Automotive LLC and its operating company, Capital Automotive L.P. (collectively, CARS), invest in real estate leased primarily to franchised auto dealerships and other auto-related businesses. Standard&Poor's Ratings Services' ratings on CARS reflect the company's highly aggressive financial leverage, which is partially offset by its fair competitive position, with relatively stable revenues and cash flow. The ratings also take account of the uncertainties posed by CARS' ownership structure: DRA, a real estate investment firm, controls CARS through its investment funds, having acquired the company in a highly leveraged transaction in 2005. CARS' has been pursuing refinancing actions over the past two-and-a-half years to extend its debt maturities and lower its financing costs. With the
