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
Wed, Apr. 29, 4:40 PM
Wed, Apr. 22, 10:02 AM
- Deals in the REIT space are picking up steam, with the latest being today's sale of Associated Estates to a Brookfield fund for $2.5B. Associated Estates has been under activist pressure for a number of months, and one wonders if any other apartment names might be next in line.
- Sector giants Equity Residential (EQR +1.3%), AvalonBay (AVB +1.2%), and Essex Property (ESS +1.2%) don't seem like likely targets, but are nicely higher on the session.
- Others: Post Properties (PPS +1.7%), UDR (UDR +1.6%), Aimco (AIV +1.3%), Camden Property (CPT +1.2%), Home Properties (HME +1.4%), Mid-America Apartments (MAA +1.1%), Investors Real Estate (IRET +0.8%).
- ETFs: IYR, VNQ, DRN, URE, SCHH, ICF, SRS, RWR, KBWY, DRV, REK, FRI, FTY, PSR, FREL, WREI
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
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.
Thu, Mar. 12, 4:45 PM
MAA vs. ETF Alternatives
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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