Regarded Solutions • 13 Comments
Core Equity Research
Jun. 26, 2015, 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.
Jun. 22, 2015, 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%).
Dec. 4, 2013, 10:17 AM
- A check of other multi-family REITs amid news of a $5B bid for BRE Properties (BRE +12.8%) by Essex (ESS -1.8%).
- Equity Residential (EQR +2.2%), AvalonBay (AVB +2.5%), UDR (UDR +2.5%), Apartment Investment and Management (AIV +4%), Camden (CPT +3.2%), Home Properties (HME +3.3%), Mid-America (MAA +1.7%), Post (PPS +4.7%).
Jun. 3, 2013, 7:02 AM
Multi-family consolidation: Colonial Properties Trust (CLP) and Mid America Apartment Communities (MAA) agree to merge, creating a larger Sunbelt-focused apartment REIT. The combined market cap of the two is about $8.6B. Under the terms, each CPT share will be converted in to 0.36 newly-issued MAA share. (PR)| Jun. 3, 2013, 7:02 AM