Are private buyers crazy? How buying at an apartment complex at a 4 cap can generate a 10% IRR
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While publicly traded apartment REITs have fallen considerably YTD, the private market [https://www.privateeyecapital.com/why-public-investors-should-care-deeply-about-the-private-market/] (the private market represents ~95% of US apartment assets; just 5% of US apartments trade publicly as REITs) for apartments has soared and in many markets is at or approaching new highs. With
3Q20 updates for EQR/AVB
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EQR and AVB reported weak results. The impact of the pandemic has hit urban areas hardest - causing increases in vacancy, declines in effective rents, and corresponding decreases in NOI. Occupancy @ EQR is ~94%. AVB saw occupancy as low as ~93% in Sept before rebounding to ~94% in October. Coupled
Essex Property Trust 3Q Results - pretty, pretty good.
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Key observations: * Strong operational performance in occupancy, rent, NOI and cash collections. Trends at Essex improved heading from 3Q into October. While on a cash basis (allocation of free rent to period where free rent was borne by ESS), NOI was down a little over 10% but on GAAP/ straight
Another cheap publicly traded collection of apartment assets: NEN
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New England Realty Associates LP (NEN) is a publicly traded limited partnership which owns apartment buildings in the greater Boston area. Through direct ownership and joint ventures, NEN has ownership interests in ~3,200 apartment units (just under 2,892 directly owned with the remainder being via 40-50% JV arrangements)
Tidbits: EQR follow up; New Actionable Investment Idea coming this week
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While I have a new actionable investment idea in the hopper, it is not yet ready to send out (interested readers: keep your eyes out this week either in your Inbox or at www.privateeyecapital.com [https://privateeyecapital.us17.list-manage.com/track/click?u=9817d763c853faa67051e844f&id=bb15970f62&e=
Germany's Vonovia & the Case for Cap Rate Compression at Essex
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A rough draft of this article was sent to subscribers to our FREE Actionable Investment Idea Newsletter [https://www.privateeyecapital.com/signup/] in advance of publication on privateeyecapital.com . If you like being in the know and want FREE weekend reading, be sure to sign up NOW. It's
Essex Property Trust (ESS): What Goldman Sachs says vs. What Goldman Sachs does
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This past week again saw the West Coast Apartment REITs in the red despite continued positive apartment operating data points and private market commentary. This provides long term investors with what I believe to be an excellent opportunity. Today I will touch upon: 1) Update on September apartment rental collections
The prudent sounding verbiage in sell-side reports can lead to terrible investment outcomes
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This is in response to Baird's enlightening research piece (Seeking Alpha synopsis here [https://seekingalpha.com/news/3614408-wait-for-rent-growth-to-bottom-on-apartment-reits-baird] ) earlier this month letting us all know to wait for rents to bottom before buying apartment REITs. The wizards at Baird think this is what worked last time. Let me
