Credit rating1)The Moody credit downgrade seems to be based in part on speculation about a continued reduction in office space demand due to the work from home trend. This work from home movement seems to have been milked pretty dry and the governments and many companies are calling workers into the office for at least 2 or 3 days a week.
2) The Central Bank moved its policy rate from 0.25% all the way up to 5%. The recent reduction to 4.75% was welcome and there is speculation about 2 or 3 more in 2024 and even, God knows, 2 or 3 more in 2025 to bring the policy rate down to almost 3%. Every quarter point decrease in mortgage rates make buildings easier to finance. Allied has about $3+ billion of debt also, so this trend is encouraging.
3)Most reits have been slammed and are trading at 30% to 70% of book. Even Riocan which used to trade at a price to book ratio of 1.1 is now trading at .67 and Allied at .33! Allied has said it is trying to upgrade its portfolio of buildings and should leap on any possibility of a attractive sale to improve its balance sheet even more.