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Steven Marks, managing director with Fitch Ratings, joined REIT.com for a video interview at REITWorld 2016: NAREIT’s Annual Convention for All Things REIT at the JW Marriott Phoenix Desert Ridge.
Marks stated that development risk across most of the REIT industry is “pretty well boxed and under control.” According to Marks, development risk in terms of the cost to complete projects relative to gross asset values has declined in recent years.
In the latest episode of The REIT Report: NAREIT’s Weekly Podcast, Steven Marks of Fitch Ratings discussed the firm’s latest research on liquidity in the REIT market and REITs’ access to the capital markets.
Steven Marks, managing director with Fitch Ratings, joined REIT.com for a video interview during REITWeek 2015: NAREIT’s Investor Forum, held in New York.
Marks said fundamentals in the real estate market generally held up in the first half of 2015 throughout all sectors. Fitch Ratings is projecting growth in same store net operating income (SSNOI) along the lines of 3 percent to 4 percent this year.
“Demand remains relatively steady,” said Marks, noting that GDP growth has continued.
In the latest episode of the NAREIT Podcast, Steven Marks, managing director with Fitch Ratings, offered his thoughts on the potential for stock exchange-listed REITs being taken private.
Steven Marks, managing director with Fitch Ratings, joined REIT.com for a video interview at REITWorld 2014: NAREIT’s Annual Convention for All Things REIT at the Atlanta Marriott Marquis.
Marks has been monitoring REITs’ stock buybacks in the second half of the year, and he noted that activity has been limited. He attributed the lack of buybacks to the performance of REIT stocks in 2014, as most are trading at prices about their net asset values (NAV).
“Thus, [the stocks] are less economic from a buyback standpoint; they’re not as accretive,” Marks said.
Most U.S. Equity REITs have strong corporate governance attributes that benefit bondholders, and they should ease their concerns about the impact of investor activism, according to a report from ratings agency Fitch Ratings, Inc.
Based on its review of 64 U.S. Equity REITs, Fitch concluded that “corporate governance is pretty strong for bondholders in the REIT space,” said Sean Pattap, a senior director at Fitch. “The positives outweigh the negatives,” he added.
As share buybacks are becoming more appealing for equity REITs, ratings firm Fitch Ratings is warning that they pose risks to the companies’ credit ratings.
Despite outperforming the broader market in the first quarter, shares of equity REITs in general continue to trade below net asset value (NAV), making share buybacks “an intriguing use of capital,” according to a report released by Fitch on April 29. As of the end of 2013, REITs traded at a 7.2 percent discount to NAV. In the previous year, pricing was essentially in line with NAV, according to Fitch.