Thu, Apr. 9, 10:30 AM
- "We expect apartment fundamentals to remain stronger for longer given favorable demographics, solid job and wage growth, little impact from for-sale housing, and lower gasoline costs," says analyst Robert Stevenson, anticipating renters will continue to absorb 5%+ rental rate hikes this year.
- His two favorite names in apartment REITs are Home Properties (HME -1.1%) and Mid-America Apartment Communities (MAA -1.5%) - they're the cheapest in the sector, he says, and he sees no reason to pay a premium price for others with similar growth characteristics.
- Risks: Spiking long-term bond yields and oversupply, but Stevenson believes the apartment companies are better-positioned to deal with both than the rest of the residential REIT sector.
- Bullish on HME and MAA, Stevenson gives Neutral ratings to Aimco (AIV -1.5%), AvalonBay (AVB -1.6%), Camden Property (CPT -1.5%), Equity Residential (EQR -1.7%), Essex Property (ESS -1.7%), Post Properties (PPS -1%), and UDR (UDR -1.7%).
- Source: Barron's
Wed, Apr. 8, 10:28 AM| Comment!
Tue, Mar. 17, 9:56 AM
- Launching coverage on the multi-family sector, Baird starts UDR (UDR -0.1%), Camden Property (CPT -0.1%), Mid-America Apartment (MAA +0.5%), and Aimco (AIV) at Outperform.
- Started at Neural are AvalonBay (AVB -0.3%), Post Properties (PPS -0.7%), Essex Property (ESS -0.2%), and Equity Residential (EQR -0.7%).
- Manufactured housing community operator Sun Communities (SUI +0.2%) rates a Neutral, as do campus housing players American Campus Communities (ACC) and Education Realty (EDR -0.2%).
- Equity Lifestyle Properties (ELS -0.6%) is started at Outperform.
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, 5:04 PM| Comment!
Wed, Jan. 28, 5:03 PM
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%).
Tue, Jan. 27, 5:35 PM| 4 Comments
Wed, Jan. 21, 10:08 AM
- Upgraded to Outperform from Neutral: Ashford Trust (AHT +1.1%), Camden Property Trust (CPT +0.1%), DDR (DDR +0.4%), Eastgroup Properties (EGP +0.3%), Host Hotels (HST -0.1%), Strategic Hotels (BEE +0.3%).
- Upgraded to Neutral from Underperform: Kilroy Realty (KRC +0.4%).
- Downgraded to Underperform from Neutral: Equity One (EQY -0.4%), Macerich (MAC -0.3%), Vornado Realty (VNO -0.7%).
- Downgraded to Neutral from Outperform: Kimco Realty (KIM -0.5%).
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)
Mon, Jan. 12, 2:40 PM
- The 10-year Treasury yield is down all the way to 1.91% and the 30-year earlier dropped to 2.47% amid a slumping stock market and WTI crude oil plummeting another 4.3% to $46.23 per barrel. Equity REITs, meanwhile, continue a big start to the year.
- ETFs: IYR, VNQ, DRN, URE, SRS, ICF, SCHH, RWR, KBWY, DRV, REK, FRI, FTY, PSR, WREI
- A sampling of individual names: Realty Income (O +0.9%), Omega Healthcare (OHI +1%), National Health Investors (NHI +1.7%), LTC Properties (LTC +1.8%), Camden Property Trust (CPT +1.3%), CBL & Associates (CBL +2.2%), Regency Centers (REG +1.2%), CubeSmart (CUBE +1.5%), Washington Real Estate Trust (WRE +0.9%), American Campus Communities (ACC +0.7%).
Dec. 31, 2014, 2:25 AM
- Real-estate investment trusts were among the hottest stocks of the year, producing a total return of 32.3%, including dividends, according to the FTSE Nareit Equity REITs Index.
- Boosted by low interest rates and an improving economy, the sector has climbed this year to its biggest gains in nearly a decade.
- Analysts are predicting REIT shares to continue to perform well in 2015, as a stronger economy and increased M&A activity drown out the risk of possible rate rises.
- With its shares rising 68.3% this year, the top-performing REIT in 2014 was Winthrop Realty Trust (NYSE:FUR).
- Related tickers: ARCP, DEI, DCT, PEB, SHO, EXR, FRT, EPR, MPW, NYRT, MAC, AVIV, CPT, EQR , PKY, MAC, SKT, WRI
- ETFs: IYR, VNQ, DRN, URE, SRS, RWR, SCHH, ICF, DRV, KBWY, REK, FRI, FTY, PSR, WREI
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. 16, 2014, 9:40 AM
- Upgraded to Buy from Neutral are Camden Property Trust (CPT +0.2%) and Equity Residential (EQR +0.1%). Upgraded to Neutral from Sell is Parkway Properties (PKY +0.3%).
- Downgraded to Neutral from Buy are Douglas Emmet (DEI -0.9%), Macerich (MAC +0.1%), Tanger Factory Outlet (SKT -0.7%), and Weingarten Realty (WRI -0.5%).
Dec. 3, 2014, 4:18 PM
Nov. 24, 2014, 2:40 PM
- Expected rent growth of 3.9% in 2015 is a bit slower than this year's 4%, according to the NAR, but it's still about 200 basis points higher than inflation.
- Though anticipated to edge upward, vacancy rates will still be scraping bottom - 4.1% in 2015 and 4.2% in 2015 vs. 4% this year. When vacancy rates are below 5%, it's considered a "landlord's market" in which property owners can continue to hike rents, says the NAR.
- Apartment REITs: Equity Residential (NYSE:EQR), AvalonBay (NYSE:AVB), Essex Property Trust (NYSE:ESS), Post Properties (NYSE:PPS), UDR, Aimco (NYSE:AIV), Camden Property Trust (NYSE:CPT), Home Properties (NYSE:HME), Mid-America Apartment Communities (NYSE:MAA).
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