Moody's Investors Service says that although it maintains agenerally negative outlook for the office property sector isnegative, its outlook for office REIT ratings remains stable. "Asoffice market fundamentals continue to weaken, we expect officeREITs to experience earnings pressure," Moody's says in a recentreport. The firm also expects development pipelines to slowconsiderably in light of the current economic climate. FitchRatings sees the office REIT sector as stable and "unchanged sincethe beginning of the year."

Among the REITs delivering steady profits lately is Pasadena,CA-based Alexandria Real Estate Equities Inc., which last weekreported that funds from operations rose 6% per share for the thirdquarter ended Sept. 30, compared with the third quarter of lastyear on revenue that climbed 13% and total FFO that was up 14%. TheFFO total was nearly $49 million or $1.53 per share.

Alexandria, which specializes in life sciences space, alsoreported leasing of 618,000 sf at 26 different properties duringthe quarter, of which 211,000 sf related to new or renewal leasesof previously leased space and approximately 407,000 rentablesquare feet related to developed, redeveloped or previously vacantspace. The company is even seeing rent growth in this uncertaineconomy, with rental rates for these new or renewal leases were onaverage approximately 8.2% higher than rental rates for expiringleases.