Fitch Ratings downgraded nine real estate investment trusts (REIT) since April, but according to the firm’s quarterly report of the trusts, recent improvements in the financial markets encourage REITs to begin positioning themselves for economic recovery. Most of the downgraded REITs moved from triple-B negative to double-B or double-B positive, but two, General Growth Properties and Thornburg Mortgage were downgraded from restricted default (RD) to default (D), due to the firms’ pending bankruptcies. Healthcare REIT Parkway Life was downgraded from triple-B plus to triple-B. For the remaining 38 REITs Fitch rates, the situation is improving. Fitch reported five of its rated REITs have gotten back in the unsecured debt market since March, with transactions totaling $2.55bn. Others executed bond tender offers totaling $2.8bn. Fitch’s report said REITs have made common equity issuances that enable them to reduce leverage and improve liquidity. While Fitch placed an overall negative outlook on US and European REITs, many individual REITs have “outlook stable” or “watch positive” outlooks assigned to them. Fitch also warned many REITs will face challenges in maintaining their current rating, mainly addressing unstable financing across capital markets and the impact of declining property values and tenant defaults is having on property markets. Write to Austin Kilgore.