AvalonBay Communities, Inc.NYSE
Mon, Nov. 28, 10:02 AM
- Evercore boosts its estimate for the 10-year Treasury yield to 3% to end next year. While REITs are in "the crosshairs" of higher rates, the improving economy should help offset that in areas like apartments and hotels, says analyst Steve Sakwa.
- He also notes the sectors have struggled of late, meaning they've discounted plenty of bad news.
- Upgraded to Buy from Hold are AvalonBay (AVB +1.9%), Essex Property (ESS +1.8%), and UDR (UDR +1.8%), with Sakwa noting supply growth on the coasts becoming less of a concern beginning in the second half of 2017.
- He's also got a valuation-related downgrade in the office space to Hold from Buy: Kilroy Realty (KRC -0.4%).
- Source: Bloomberg
Wed, Nov. 23, 7:58 AM
- What's the play here? AvalonBay (NYSE:AVB) and Essex Property (NYSE:ESS) are heavily exposed to the pricey coastal markets where oversupply is crimping business, but Camden Property Trust (NYSE:CPT) is more about the Sunbelt.
- The theme isn't a new one this year, and it's reflected in the stocks' performance - AVB and ESS are down more than 10% YTD, while CPT is up 1.25%.
- BAML's Jeffrey Spector downgrades AvalonBay and Essex to Neutral from Buy, and lifts Camden to Buy from Neutral.
- While he's at it, he upgrades Education Realty Trust (NYSE:EDR) to Buy, noting its strong balance sheet and accretive campus development pipeline.
- Source: Bloomberg
Mon, Nov. 14, 10:03 AM
- The bond market was closed on Friday, keeping rates in check and allowing REITs a respite from the week's bout of selling. The respite was short-lived though, with the selloff resuming this morning as the 10-year Treasury yield jumps 10 basis points to 2.255%.
- Realty Income (O -1.5%), Public Storage (PSA -1.3%), Welltower (HCN -0.6%), Equity Residential (AVB -1.6%), AvalonBay (AVB -1.6%), Simon Property (SPG -1.5%), Kimco (KIM -0.5%), Eastgroup (EGP -0.5%), American Campus (ACC -1.7%).
- Fading the action are some office REITs as players eye a big boost in government spending: Government Properties (GOV +1.6%), Boston Properties (BXP +1%), First Potomac (FPO +1.2%).
- Also fading the negativity despite the stronger dollar are the previously very roughed-up lodging REITs as perhaps they discount a stronger economy: Ashford Hospitality (AHT +3.7%), Sunstone Hotel (SHO +3.2%), LaSalle Hotel (LHO +2.2%), Pebblebrook Realty (PEB +3.7%), Summit Hotel (INN +1.6%), Hospitality Properties (HPT +1.2%), RLJ Lodging (RLJ +2.8%)
- Previously: "Bond vigilantes" term comes out of retirement (Nov. 14)
- ETFs: VNQ, IYR, DRN, RQI, URE, SCHH, ICF, RWR, SRS, RNP, RFI, JRS, KBWY, NRO, DRV, RIT, RIF
Thu, Nov. 10, 5:13 PM
Wed, Nov. 9, 1:48 PM
- The 10-year U.S. Treasury yield is higher this session by 21 basis points to 2.07% after having fallen as low as 1.70% at one point last night. TLT -4%, TBT +8%
- On the shorter end, Fed Funds futures - after last night having priced out any chance of rate hike in December - have returned to pricing in nearly 100% chance of a move.
- Facing more serious competition for yield, utilities (XLU -3.4%) and REITs (VNQ -1.7%) are having a rough session.
- Individual REIT names: Realty Income (O -5.1%), Spirit Realty (SRC -3.3%), Omega Healthcare (OHI -2%), Welltower (HCN -3.1%), Equity Residential (EQR -2.4%), AvalonBay (AVB -2.1%), General Growth (GGP -2.3%), Kimco (KIM -2.3%), DDR (DDR -2.3%).
- Notably fading the move even as the dollar turns sharply higher are the lodging REITs: Ashford (AHT +2.9%), LaSalle Hotel (LHO +3.1%), Pebblebrook Hotel (PEB +3.9%), Chatham Lodging (CLDT +4.2%), Hersha (HT +3.7%)
Tue, Oct. 25, 10:01 AM
- Q3 FFO of $2.11 missed the company's July guidance by $0.06, and core FFO of $2.07 was a penny shy.
- For established communities, average rental rates grew 3.9%, with economic occupancy down 0.1% for an increase in rental revenue of 3.8%. NOI for established communities up 4.3%.
- NOI growth in SoCal was 11.1%, and in NoCal was 5.9%. In the Pacific NW, NOI growth was 9.5%.
- Things are more subdued back east, with NOI growth of 1.5% in metro NY/NJ, 0.6% in New England, and 0.4% in the Mid-Atlantic.
- Q4 core FFO per share is expected to be $2.08-$2.14; full-year of $8.15-$8.21. Full-year rent revenue growth forecast is trimmed by 25 basis points at the top end to 4.25-4.5%. Operating expense growth is lifted to 2.9-3.3% from 2-2.75% previously; NOI growth of just 4.6-5% from 5-5.75% previously.
- Previously: AvalonBay Communities FFO in-line (Oct. 24)
- AVB -1.6%
Mon, Oct. 24, 4:19 PM
Sun, Oct. 23, 5:35 PM
Mon, Sep. 12, 4:18 PM
Thu, Sep. 8, 10:14 AM
- May-August is typically peak apartment-leasing season in Manhattan, but landlords were unable to push up rents, as a report pegs the median monthly rent last month at $3,399, flat from one year ago. This comes as 6,285 new leases were signed, the most in any month dating back to January 2008.
- At issue, according to Jonathan Miller of property appraiser Miller Samuel, is excess supply - and it's likely to remain a challenge for the next year or two.
- According to Citi Habitats, 19% of new leases signed last month came with some form of landlord concession such as a free month, or payment of the broker's fee. One year ago in August, such sweeteners were seen on just 7% of deals.
- Interested parties: AvalonBay (AVB -1.2%), Equity Residential (EQR -1.6%), UDR (UDR -1%), Aimco (AIV -1%)
Tue, Sep. 6, 10:24 AM
- Amid concerns about slowing rental markets on the coasts, the stock has pulled back modestly from a 52-week high of $192 hit last last spring, closing Friday at about $175. Sandler O'Neill today upgrades to Buy from Hold.
- AVB +1% to $177.25.
Thu, Aug. 25, 7:58 AM
- Analyst James Sullivan moves over the BTIG from Cowen & Co. Checking apartment REITs:
- AvalonBay (NYSE:AVB) is started at Buy and $208 price target after being rated only a Hold with $192 price target at Cowen, with Sullivan saying the company is the sector's best external growth story.
- Also a Hold at Cowen, UDR is initiated at Buy with $42 price target, with Sullivan saying the portfolio mix of primary and secondary markets and moderate price points has outperformed in a decelerating market.
- Essex Property Trust (NYSE:ESS) also merits an upgrade - now a Buy at BTIG.
- A Buy at Cowen, MAA is now only Neutral at BTIG.
- Monogram Residential (NYSE:MORE) is a Buy at BTIG after being rated the same at Cowen.
- See also: More new REIT coverage at BTIG (Aug. 25)
Tue, Jul. 26, 3:01 PM
- Concessions of $300K in Q2 were four times higher than in Q2 one year ago, with sweeteners the greatest in NYC, NoCal, and New England, according to COO Sean Breslin.
- Higher competition from the surge in newly built apartment buildings will drive revenue in communities open at least 12 months down by about 0.4%, says the company. Also at work: Job growth in the areas where AvalonBay (AVB -1.9%) owns properties was weaker than expected in Q2.
- "We did not see the same seasonal lift we’ve seen in prior years,” says CEO Timothy Naughton. "There's just not enough high-paying jobs being created to absorb al the new supply," says Breslin.
- Equity Residential (EQR -0.6%), Essex Property (ESS -1.8%), UDR (UDR -1.1%), Camden Property (CPT -1.3%)
Mon, Jul. 25, 4:30 PM
- Q2 core FFO of $2.03 vs. $1.87 one year ago. Company in April had guided to $2 per share.
- Average rental rates for established communities up 5.2%, offset by a 20 basis point decrease in economic occupancy. NoCal and SoCal were unsurprisingly strong spots, with the Mid-Atlantic the weakest, up just 1.6%.
- Q3 core FFO per share is guided to $2.05-$2.11, and full-year to $8.13-$8.33. The full-year midpoint is unchanged from previous guidance.
- Conference call tomorrow at 11 ET.
- AVB flat after hours
Mon, Jul. 25, 4:21 PM
Sun, Jul. 24, 5:35 PM