Author Topic: High Quality Multi-family REITs - EQR, CPT, ESS, AVB  (Read 10155 times)

Cigarbutt

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Re: High Quality Multi-family REITs - EQR, CPT, ESS, AVB
« Reply #80 on: July 30, 2020, 05:41:04 AM »
...
Be trigger warned of my overprivileged statements below, but just to give some anecdotal flavor
I live in wealthy DC Burbs. Two software engineers from NYC just bought a $2mm+ house down the street from me. they aren't going back. the headwinds are real as it relates to the 30+ year old accelerating their moves to the burbs. EQR has also noted international students as an issue. My sister went to school in Boston and rented at an Archstone owned apartment (now owned by EQR). She rented a $2K / month apartment. to the extent college kids aren't going back (temporarily) that hurts. I know some investment banking graduates that are training remotely. There's a a big disruption coming. Will this be important in 3 years or 5 years, maybe not (I would wager not). But we should acknowledge the headwinds. The 30+ year olds are buying houses and the 23 year olds are at their parents' house.
More anecdotal flavor.
i typically rent an apartment close to a metropolitan university that has a significant international student participation. Every year, at this time of year, the apartment is offered. Typically, there is significant pricing power and a very large number of applicants and it's possible to use a multi-layer filter process. This year: minimal "views" and zero demand. FWIW, i think this short term noise is likely to accelerate underlying trends, for the longer term.
https://www.spglobal.com/ratings/en/research/articles/200709-student-housing-in-the-covid-19-pandemic-era-school-s-out-but-for-how-long-11566259
---) back to REITs etc


CorpRaider

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Re: High Quality Multi-family REITs - EQR, CPT, ESS, AVB
« Reply #81 on: July 30, 2020, 06:07:33 PM »
Any idea why EQR appears to be the dog in the apartment Reit space? MAA seems to be the top performer.

My (casual/tourist to the space) understanding is that EQR is perceived as more exposed to the urban flight risk/covid impacts and MAA is more exposed to second and third tier cities in the sun-belt which are perceived to be increasing in desirability if remote work truly comes to pass.

I haven't yet figured out who, if anyone, is in control/behind MAA.  I don't love rolling with organizations controlled by hired hand, sales guys.

I agree with the general sentiment in the thread that the sector ain't cheap enough now.

In my opinion, this covid, remote work, protests combo could really touch of a feedback loop of urban flight (maybe like in the 70's); this could include clobbered state and local budgets and ham handed (or otherwise) attempts to fix that with taxes combined with "eating the rich."  The covid thing and protests are almost worst case scenario for cities...like almost every reason to live there is moot right now, but we will just have to see if it touches off a little (or big) feedback loop. 

All that said, I guess I'm saying I could see it being an "intermediate term" problem; but I wouldn't bet against the power of the network effects of cities long term.  Can you imagine how awesome they could be with real live-work-play design and no commuter car infrastructure?  Oh yeah, sort of like Europe, but bigger and more functional.
« Last Edit: July 30, 2020, 06:12:28 PM by CorpRaider »

thepupil

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Re: High Quality Multi-family REITs - EQR, CPT, ESS, AVB
« Reply #82 on: August 09, 2020, 07:11:52 AM »
https://www.google.com/amp/s/therealdeal.com/2020/08/07/kkr-teams-up-with-dalan-on-big-brooklyn-multifamily-buy/amp/

KKR buying shiny new Brooklyn portfoli for $675K/ unit. It was rumored to be in talks originally at $980K/ unit. It didn’t mention average rent/unit.

Just a data point / context for EQR at $370K EV / unit and the type of haircut people are taking. Of course only 9000 of EQR’s 78K are in NYC they are at average $3900/month versus total EQR of $2800.  I’m not saying all of EQR is “worth” $675K just pointing out that there’s a real post COVID trade at that level.
« Last Edit: August 09, 2020, 07:22:13 AM by thepupil »

CorpRaider

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Re: High Quality Multi-family REITs - EQR, CPT, ESS, AVB
« Reply #83 on: Today at 09:45:55 AM »
Alright, I'ma buy a little EQR.