Operational performance and market performance tend to, and should, move in tandem, but occasionally, an opportunity pops up where the market just gets it wrong. This year, a small ($758mm) multi-family REIT, Associated Estates (AEC), became a phenomenal opportunity as its operational outperformance was met with market underperformance.
We will cover AEC in more depth later, but first, let us cover the fundamentals of the multi-family sector.
The sector has had a long run of success, and its upward trend seems to be continuing, but at a declining speed. 3rd-quarter vacancy rate fell down to an incredible 4.6% from the already low 5.6% in 3Q11. Such occupancy has provided landlords with the power to raise...
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