NEW YORK CITY-For many real estate investment trusts, theoutlook for new development and construction has been dim—and thepool of new projects is continuing to dry up. According to newresearch from Fitch Ratings, the publicly-tradedREIT development pipeline is currently 55% smaller than its peaklevel in 2007, a sign that more companies are seeking to acquireexisting properties as opposed to building them ground-up.

“By and large, companies have not ramped up developmentpipelines,” Steven Marks, managing director atFitch Ratings, tells GlobeSt.com. “It is really growth viaacquisitions and organic cash flows from existing portfolios.”

The trend, highlighted in a new Fitch report entitled “US EquityREITs Recalibrate Development for New Normal,” found that afterpeaking $34 billion in the fourth quarter of 2007, developmentprograms decreased sharply over the next 2.5 years due to a“significant demand slowdown, combined with most REITs focus onpreserving liquidity and reducing leverage.” The report saystotal development pipelines represented only 2.7% of totalundepreciated assets as of March 31, 2012, down from a peak of 7.6%as of 2007, indicating that development exposure remains “fairlymuted” and “not a meaningful” credit risk.