Fitch Ratings affirmed its long-term issuer default rating on Essex Property Trust Inc. and its operating partnership Essex Portfolio LP at BBB+ and revised the outlook to stable from positive.
The rating agency said the change in outlook takes into account its opinion that there is not enough cushion in the financial policies of the multifamily real estate investment trust to sustain higher ratings through-the-cycle in spite of its current 5.5x leverage.
Fitch noted that the ratings factor in the REIT's robust multifamily portfolio within key densely populated and supply constrained markets in northern and southern California and Seattle. According to the rating agency, Essex Property has one of the strongest management teams among its peers, based on its track record of "superior" asset management and capital allocation.
