Mon, May 11, 8:42 AM
- Independence Realty Trust (NYSEMKT:IRT) speeds its scale-up with an agreement to purchase Trade Street Residential (NASDAQ:TSRE) for cash and stock. The deal will boost the number of properties owned by IRT to 50 from 31, with the number of units increasing 55% to 14,044.
- IRT's average property age will dip to 20 years from 25, and average base rents, occupancy levels, and operating margins will all rise.
- The deal is expected to be accretive to 2016 core FFO and AFFO per share.
- The TSRE chairman and CEO will each join IRT's board, expanding the size to 7 from 5.
- Consideration: $3.80 in cash and 0.4108 shares of IRT for each share of TSRE. At IRT's $8.57 close on Friday, it values TSRE at just $6.21 per share vs. its most recent close of $7.08. At IRT's "reference price" of $9.25 - a 1% premium to 45-day average - it values TSRE at $7.60 each. IRT has the option to increase the cash portion of the consideration to $4.56 per share, with a corresponding cut in the stock portion.
- IRT's property manager is RAIT Financial (NYSE:RAS) - also an owner of 23% of IRT - and it supports the deal
- Source: Press Release
- Previously: Trade Street Residential misses by $0.01 (May 11)
Mon, May 11, 8:17 AM
Thu, Mar. 19, 7:24 AM
Wed, Mar. 4, 7:02 AM
Wed, Feb. 18, 12:47 PM
- Including dividends, apartment REITs returned 39.7% in 2014, the best among all real estate sectors, according to Nareit, which says REITs overall returned a still-pleasing 28%.
- REITs in general have cooled of late - off 1.7% in February, with apartments off 1.1% as some analysts ring the register.
- Morgan Stanley's Haendel St. Juste says slowing growth combined with pricey stock prices isn't the best combination. He notes the names are trading at 10-15% premiums to NAV vs. 10-15% discounts one year ago.
- Then there's oversupply, especially in company towns like D.C. and in the Texas oil belt. Over the past six months, builders have broken ground on multifamily apartments at an average pace of 357K units per year - 26% more than the 30-year average.
- Names of interest: EQR, AVB, ESS, PPS, UDR, AIV, CPT. HME, MAA, TSRE, AEC, IRET
Wed, Jan. 28, 12:23 PM
- Expect plenty of foreign capital to continue flowing into the sector, says MLV analyst Ryan Meliker. This will contribute to cap rate compression, making it more difficult for REITs to make accretive purchases.
- The West Coast should lead the country in job generation, and thus rent growth, making Essex Property Trust (ESS) - essentially a pure-play on major markets there - an interesting pick.
- The Northeast is split - with Boston and NYC expected to outperform on rent growth, but Philadelphia, Baltimore, and D.C. predicted to lag.
- Strength in the Southeast will be led by Atlanta, and Central and South Florida. Meliker's top pick, Preferred Apartments (APTS +0.6%) has a strong presence in Atlanta.
- "Conference participants agreed that Houston was in for difficult times ahead – there was no sugar coating how oil prices might affect job growth and therefore demand for multifamily housing."
- Others of interest: Aimco (AIV +0.6%), Associated Estates (AEC +3.1%), AvalonBay (AVB -0.2%), Post Properties (PPS +0.3%), UDR (UDR +0.3%), Camden Property (CPT -0.3%), Home Properties (HME +0.2%), Mid-America (MAA +0.1%), Trade Street Residential (TSRE -0.6%), Equity Residential (EQR +0.3%).
Wed, Jan. 14, 7:34 AM
- The hot sector is cut to Market Weight from Overweight at Wells Fargo amid a big reshuffling of ratings at the bank.
- Names of interest: EQR, AVB, ESS, PPS, UDR, AIV, CPT, HME, MAA, TSRE, AEC, IRET.
- Previously: Sell the net lease REIT sector says Wells Fargo (Jan. 14)
- Previously: Wells Fargo pulls the plug on mortgage REITs (Jan. 12)
Dec. 16, 2014, 10:49 AM
- National annual effective rent growth of 4.7% in November is the strongest result since August 2011, reports Axiometrics.
- Axiometrics' Jay Denton: "The combination of an improving job market, and a growing percentage of the population that prefers renting to owning, continues to boost apartment demand."
- Year-to-date rent growth of 5% makes 2014 the strongest post-recession year. 2010 was the previous high at 4.6%.
- The occupancy rate continued a seasonal decline, but at 94.8% it's the strongest November read since Axiometrics started reporting monthly in 2008.
- Source: Press release
- Interested parties: EQR, AVB, ESS, PPS, UDR, AIV, CPT, HME, MAA, TSRE, AEC, IRET
Dec. 15, 2014, 7:14 AM
Nov. 3, 2014, 7:08 AM
Oct. 22, 2014, 12:26 PM
- Simplifying its capital structure, Trade Street Residential (TSRE +0.1%) redeems all of its outstanding Class A preferred stock in exchange for four non-income producing land parcels and $5M in cash.
- CEO Richard Ross says the company has one more non-income producing land parcel and it is currently under a non-binding contract to be sold. The preferred exchange will be immediately accretive to net asset value and FFO.
- Source: Press Release
Oct. 14, 2014, 3:10 PM
- The vacancy rate ticked higher to 4.2% in Q3 from 4.1 a quarter earlier - not much of a move, but the first increase in almost five years, according to REIS. Another survey - this one from MPF Research - says vacancy fell to 4.3% from 4.4% across the country's top 100 markets.
- Where the two reports both agree, however, is that there were significant construction deliveries during Q3 and a full pipeline of new construction going forward, suggesting neither vacancies nor rents have a lot of room improvement.
- The potential weakening fundamentals come as apartment REITs have been this year's top-performing REIT sectors (make that any sector) with a total return of 23.65% YTD. Can the outperformance continue?
- Names of interest are almost all having a big day today as interest rates continue to fall. One suspects that as long as rates stay low and first-time homebuyers or those with less-than-perfect credit have trouble getting mortgages, the apartment REITs might still get a bid: EQR, AVB, ESS, PPS, UDR, AIV, CPT, HME, MAA, AEC, IRET, TSRE
Sep. 30, 2014, 5:35 PM
Sep. 15, 2014, 4:29 PM
Aug. 20, 2014, 9:29 AM
- “We will take what economic activity we can get, but our housing market model was designed in the U.S. to build a lot of single-family homes for owners, not multifamily homes for renters," says Diane Swonk commenting on yesterday's big jump in housing starts.
- A big share of the gain came from multifamily starts - typically a volatile number - but a rolling 12-month total shows apartment construction at its highest level in 25 years. Single-family housing has a bigger multiplier effect for both consumer spending and employment, says Swonk.
- As for apartment owners, a separate report showed rents up 3.3% Y/Y, their fastest pace of increase in five years. It's little mystery why the stocks of companies like Equity Residential (NYSE:EQR) and AvalonBay (NYSE:AVB) are at all-time highs, but their owners may want to mull the fast pace of building.
- Others of interest: ESS, PPS, UDR, AIV, CPT, HME, MAA, TSRE, AEC, IRET, APTS
Aug. 11, 2014, 8:01 AM
- Core FFO of $2.2M or $0.06 per share vs. a loss of $300K or $0.03 one year ago. Dividend is $0.095.
- Excluding a one-time property tax settlement, same store NOI grew 5.5% Y/Y, thanks to occupancy rising 60 bps to 96.2% and a 3% rise in rents to $879 per month.
- Conference call at 11 ET
- Previously: Trade Street Residential misses by $0.02
- TSRE flat premarket
TSRE vs. ETF Alternatives
Trade Street Residential Inc is a full service, vertically integrated, self-administered and self-managed corporation focused on acquiring, owning, operating and managing garden-style & mid-rise apartment communities in United States and Texas.
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