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Private Eye Capital

5 Feb, 5 tweets, 2 min read

$ESS Love the way they describe capital market activities on the call - I'm paraphrasing "Selling properties at pre COVID pricing and buying back stock at a significant discount to NAV". While volumes have declined in the private market mgmt believes suburban properties would

fetch pre-COVID pricing or better (vast majority of ESS is suburban) whereas urban property values are estimated to be -5% vs. preCOVID w/ cap rates of 4% or lower. Mike Schall & co are the best in the biz $UDR $EQR $AVB $VNQ

In the process of selling 3 assets including San Fran building significantly hit by COVID. 3.2% cap rate on in place rent/ 3.8% pre COVID. Private market (real market) remains strong. Ignore the Wall St wizards panning the stock. Sell side wastes mgmt's time with so many

useless questions. They really don't seem to understand how to analyze and value these assets. Why put a 6 month price target on these? Completely moronic -no idea why anyone listens to $GS $JEF $C $MS $JPM $PIPR

privateeyecapital.com/essex-fy-resul…

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Private Eye Capital

@PrivateEyeCap

9 Feb

https://twitter.com/TargetPrices/status/1359166495633383430

$CPT -Private market sells us that NAV here is ~$125. Good mgmt track record; should trade at a premium. Baird & $BAC putting out usual sellside nonsense today (how is it worth 10% less than yesterday $BAC?). $BAC thinks it knows better than $billions in private mkt skin in game

https://twitter.com/TargetPrices/status/1359166495633383430

participants. Haha. Notes from call: There is a strong bid for Class B value add (apartment classes explained here) apartments in the private market. The cap rate spread between Class B 'value add' apartments and Class A apartments has narrowed considerably over the last couple

of years. Camden plans to take advantage of the relative strength of the Class B pricing by selling Class B and rotating the proceeds into Class A assets. This will reduce associated capital expenditures over the life of the asset. Overall this makes sense to rotate into higher

Read 4 tweets

Private Eye Capital

@PrivateEyeCap

5 Feb

$MAA (2/4) call highlights: 1)demand is strong -now getting ‘normal’ 5-6% renewal rates (2)see supply moderating in 2H (I always take this with a grain of salt in the sunbelt!) #reits $CPT $VNQ $NXRT #multihousing #apartmentinvesting #dividends #cre (3)Valuations are high/cap....

3)Cap rates at all time lows in key markets (mid 3s/low 4s). This makes it impossible for MAA to acquire assets accretively. Instead they will do some opportunistic divestitures and (4)develop new apartment buildings (2,600 underway)- development yields are expected to be around

6% and in-process projects include Austin and Phoenix. While dev yields are appetizing, recall that it takes ~3+ yrs to stabilize/develop AND 2,600 units is ~2.5% or so of MAA's total # of apartments so this doesn't move the needle a ton. That said, I still like it here and...

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