Fitch: BRE outlook negative

Fitch Ratings said it changed BRE Properties, Inc.'s outlook to negative from stable and affirmed its issuer default rating, unsecured revolving credit facility, senior unsecured notes and convertible senior notes at BBB and its preferred stock at BBB-.

The agency said the negative outlook centers on the weakening fundamentals within BRE's geographically concentrated portfolio. Approximately 83% of same-store net operating income is derived from five regions within California.

The ratings are supported by BRE's high-quality portfolio of multifamily assets in supply-constrained locations, the company's recent actions to address near-term unsecured debt maturities, solid debt service coverage and adequate risk-adjusted capitalization ratios, Fitch said.

Credit concerns include the company's geographic concentration, the gradual increase in leverage ratios over the past several years and the high secured debt-to-total debt ratio, the agency said.

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