MOODY'S REPORTS STABLE RATING OUTLOOK FOR REITS AND REOCS.

THE RATING OUTLOOK FOR U.S. REAL estate investment trusts (REITs) and REOCs is stable, according to the latest annual report on the industry by Moody's Investors Service, New York. According to the report, "U.S. REIT and REOC 2000 Industry Outlook," a growing emphasis on operational efficiency at many real estate firms, as well as a more manageable appetite for risk, has stabilized the industry's credit profile. The credit quality of the U.S. commercial property company sector is now generally sound, following a period of negative pressure and downgrades for many REIT and REOC ratings, according to Moody's. Capitalization and financial leverage are satisfactory, liquidity is adequate and real estate fundamentals and earnings remain healthy overall. Moody's cautions, however, that REITs' appetite for variable-rate debt and secured funding remains a credit rating concern because they reduce financial flexibility. Short-term, floating-rate debt also increases refinancing risk, according to the report, and could result in downward pressure on some REITs' ratings and outlooks.