Moody's rates four industrial REITs: Duke Realty (Baa2, Stable Outlook), First Industrial (Ba3, Positive Outlook), Liberty Property (Baa1, Stable Outlook), and Prologis (Baa2, Stable Outlook).

Credit metrics for the rated industrial REITs have improved year to date, and Moody's expects their metrics to continue to improve into 2013. "Our rating outlook for the industrial REITs is stable," says Phillip Kibel, a Moody's senior vice president and author of the report. "Rated industrial REITs still have large unencumbered portfolios with good quality assets and modest on-balance-sheet secured debt levels."

A need for additional leasing to stabilize current development pipelines, coupled with large debt maturities over the next two years, present some risks, says the Moody's report. However, it concludes that those risks are mitigated by the availability of plentiful cost-effective capital. "We do not expect any negative rating actions over the next 12 to 18 months assuming no dramatic economic shifts or exogenous events," says Moody's Kibel.

Macroeconomic uncertainties, given the European debt crisis, slowing growth in China and the approaching US "fiscal cliff," continue to produce headwinds for the sector, according to the rating agency. "We anticipate industrial real estate fundamentals will stabilize over the next nine to twelve months, assuming no recession in the US and no large sovereign defaults in Europe," says Kibel.

The report is available at

http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_147642.

***

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Philip Kibel Senior Vice President Commercial Real Estate Finance Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Tadd Philipp Senior Vice President Commercial Real Estate Finance Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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