Fri, Nov. 20, 9:26 AM
- Apartment rents are still strong, but the rate of growth is slowing, according to Zillow, reporting a nationwide increase of 4.5% Y/Y in October, down from 5.3% in September and 6.6% in July.
- Even in red-hot San Francisco, a rent gain of 15.2% last month stands against 19% in June and July.
- At issue is more supply, says Zillow, noting projects begun a couple of years back are starting to come online.
- With rental affordability down, the relative affordability of homeownership is on the rise, says Zillow, noting home values up 4.3% - the fastest pace in a year.
- Apartment REITs: EQR, AVB, ESS, PPS, UDR, AIV, CPT, MAA, IRET, IRT, MORE, NXRT, APTS, BRG
Thu, Oct. 29, 3:26 PM
- Q3 core FFO of $109.9M or $1.38 per share vs. $101.6M and $1.28 one year ago.
- Same-store NOI up 8.1% Y/Y, with revenue up 6.1% and expenses up 3%.
- Average revenue per occupied unit of $1,123 up 5.1%, with average effective rent up 4.6%. Average physical occupancy up 90 basis points. Resident turnover of 53.3% on a rolling twelve-month basis.
- Full-year core FFO per share guidance is boosted to $5.39-$5.49 from $5.25-$5.41.
- Previously: Mid America Apartment Communities beats by $0.05, beats on revenue (Oct. 28)
- MAA +2.7%
Wed, Oct. 28, 5:27 PM
Tue, Oct. 27, 5:35 PM
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Mon, Oct. 26, 2:38 PM
- "The planned sales will likely raise questions regarding the apartment cycle as well as the 'call' for certain submarkets and asset types," says Cowen's James Sullivan, as Equity Residential (EQR +2.2%) announces the sale of $5.3B of apartment properties and looks to sell another $700M worth next year.
- Zell rung a bell for the top of the last real estate cycle with the early 2007 sale of his Equity Office Properties for $39B.
- Citi's Michael Bilerman acknowledges the sale should make good fodder for the bears, but he remains bullish on EQR. Wells Fargo's Jeffrey Donnelly is impressed with the timing, and applauds EQR for narrowing its focus on larger properties in core urban markets.
- Previously: Equity Residential sells chunk of holdings for $5.365B (Oct. 26)
- Other multi-family REITs: AvalonBay (AVB -0.5%), Essex Property (ESS -0.6%), Post Properties (PPS -0.1%), UDR (UDR -0.2%), Aimco (AIV +0.1%), Mid-America (MAA -0.3%), Investors Real Estate (IRET -0.1%), Independence Realty (IRT -2.6%).
Tue, Oct. 20, 8:58 AM
- It's been a tough year for a lot of REITs, but not for Mid-America Apartment Communities (NYSE:MAA), which is ahead about 13%. Looking for more, Raymond James upgrades to Outperform.
- Aimco (NYSE:AIV) has also held its own with about a 9% gain year-to-date. Raymond James upgrades to Strong Buy from Outperform. The stock's higher by 1% in thin premarket action.
Mon, Oct. 5, 9:38 AM| Mon, Oct. 5, 9:38 AM | Comment!
Fri, Oct. 2, 12:02 PM
- The multi-family vacancy rate edged up to 4.3% in Q3, according to Reis, Inc, up from a post-recession low of 4.2% in Q2. With another 200K new units expected to hit the market this year, look for further increases in vacancies, say some economists. The historical average is about 5.5%.
- "I don’t think this is the death knell for the apartment market, but it is going to be more challenging over the next four to five years than it was over the last four to five,” says Reis' Ryan Severino.
- Rents, however, rose 4.2% year-over-year in Q3, the first time since 2007 above the 4% mark. It's not unusual to see higher rents accompany higher vacancies, as higher vacancies mean new units - usually with higher rents - coming to market. Severino doesn't see rents flattening out until 2017.
- Interested parties: Equity Residential (EQR -0.5%), AvalonBay (AVB -1.1%), Essex Property (ESS -0.7%), Post Properties (PPS -0.8%), UDR (UDR -0.4%), Aimco (AIV -1.1%), Camden Property (CPT -0.3%), Mid-America (MAA -0.4%), Independence Realty (IRT +1%), Preferred Apartments (APTS -0.6%), Investors Real Estate (IRET -1.8%).
Thu, Sep. 24, 4:21 PM
Fri, Sep. 18, 3:06 PM
- Bullish on the apartment reason for al the usual reasons - supply/demand balance, lack of construction, low home ownership rate - DA Davidson analyst Steve Shaw prefers to invest in the Sun Belt. Along with the West Coast, the Sun Belt is ahead of the national average in job growth - meaning higher occupancy and higher rents.
- Initiated with Buys are Bluerock Residential (BRG +3.4%), Camden Property Trust (CPT +0.5%), Investors Real Estate Trust (IRET +1.6%), Mid-American Apartment (MAA +0.7%), and Preferred Apartments (APTS +0.7%).
- Started at Neutral is Essex Property Trust (ESS +0.7%). In other Essex news, it was upgraded to Buy at Cantor Fitzgerald, with price target lifted to $251 from $236.50.
Thu, Aug. 13, 1:37 PM
- According to Zillow, renters spent 30.2% of income on rent in Q2, the highest percentage since as far back as the data go (1979). In comparison, the average between 1995 and 2000 was just over 24%.
- Los Angeles is tops for unaffordability at 49%, with San Francisco not far behind at 47%. In NYC, renters historically have paid about 25% of income for rent, but that has gone up to 41%. Known for being more affordable than other major cities, the luxury condo market has transformed Miami, and renters there now pay 44.5%.
- The solution, naturally says Zillow, is to buy. In most cities, buyers can expect to pay less than 30% of income towards mortgage payments. "Rents are crazy right now," says Zillow Chief Economist Dr. Svenja Gudell.
- For apartment REITs, one is left to wonder how much more room there is to boost rents. Names of interest: Equity Residential (NYSE:EQR), AvalonBay (NYSE:AVB), and Essex Property (NYSE:ESS) - a big player on the West Coast - are the most sizable companies. Also: UDR, Post Properties (NYSE:PPS), Aimco (NYSE:AIV), Camden Property (NYSE:CPT), Mid-America (NYSE:MAA), Trade Street Residential (NASDAQ:TSRE), Investors Real Estate (NYSE:IRET), Independence Realty (NYSEMKT:IRT), Bluerock Residential (NYSEMKT:BRG), NexPoint Residential (NYSE:NXRT).
Wed, Jul. 29, 5:20 PM
Fri, Jun. 26, 9:55 AM
- Lone Star Funds this week agreed to buy Home Properties for about $7.6B and two months ago Brookfield Asset Management agreed to buy Associated Estates for roughly $2.5B.
- "There is potential for something more to happen," says institutional REIT trader David Auerbach. "The smaller, local operators could be potential targets."
- Valuation helps too, and though apartments have been one of the best-performing segments in real estate - with near-record occupancy, and rising rents and property values - the stock prices of apartment REITs have failed to keep up.
- Potential targets, according to Jeffrey Langbaum of Bloomberg Intelligence, could be Mid-America Apartments (NYSE:MAA), Camden Property Trust (NYSE:CPT), or Post Properties (NYSE:PPS). All three operate in the South and trade at discounts to the sector's median price/FFO multiple. Their market caps are in the $3B-$6.5B range.
- Other possible targets include Bluerock Residential Growth (NYSEMKT:BRG) and Preferred Apartments (NYSEMKT:APTS) - both with market caps of about $200M, making them easily digestible.
Mon, Jun. 22, 12:48 PM
- Home Properties is up 2.3% after agreeing to sell itself to Lone Star Funds, but the news isn't doing a whole lot to lift M&A animal spirits in the sector for now.
- As part of the deal UDR (UDR +0.5%) will acquire from Lone Star up to $908M of Home Properties' apartments in the D.C. area. The purchase is expected to boost AFFO by $0.015 per share in 2016.
- Presentation slides
- Earlier this year, Associated Estates agreed to sell itself to a Brookfield Asset Management fund, and last year there was Essex Property Trust's purchase of BRE Properties.
- Equity Residential (EQR -0.3%), AvalonBay (AVB), Post Properties (PPS -0.2%), Aimco (AIV +0.2%), Camden Property (CPT +0.1%), Mid-America (MAA +0.2%), Trade Street Residential (TSRE), Investors Real Estate (IRET -0.4%), NexPoint Residential (NXRT -0.5%), Bluerock Residential (BRG -1.4%).
Tue, May 19, 4:22 PM
Wed, Apr. 29, 4:57 PM
- Q1 core FFO of $105.2M or $1.32 per share vs. $95.6M and $1.21 one year ago.
- Same store NOI up 5.8% Y/Y. Average effective rent up 3.9%. Physical occupancy up 0.6% to 96.3%.
- Resident turnover remains low at 53.9% on a rolling twelve month basis.
- The exit from nine tertiary markets was completed in Q1 with the sale of 18 properties for $233.3M - a cap rate of 5.6% and a 14.1% IRR.
- Guidance: Core FFO per share of $5.09-$5.33 is reaffirmed. Q2 is expected at $1.23-$1.35, Q3 $1.21-$1.33, Q4 $1.27-$1.39.
- Conference call tomorrow at 9 ET
- Previously: Mid America Apartment Communities beats by $0.03, beats on revenue (April 29)
- MAA flat after hours
Mid-America Apartment Communities is a multifamily focused, self-administered and self-managed REIT. The Company owns, operates, acquires and develops apartment communities in the Southeast and Southwest region of the United States.
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