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10 Feb, 3 tweets, 2 min read
$EQR results as expected. 2021 NOI guide -12-15% so peak (2019) to trough (2021) decline in NOI expected to be -17-20%. I'd been thinking -20% after 3Q#s. Like at $AVB, $ESS, $UDR rents stabilizing/occupancy increasing. #reits $VNQ #dividend #cre #investing $TLT
No longer crazy cheap but reasonably attractive vs. private market/alternatives $SPY $IWM $MDY $TLT $GLD $BTC. I assume NOI recovers to 2019 levels by ~2024 and stock has fair value of $80-85 at that time. Coupled w/ divvies received this produces a 4 year IRR of ~8-9%.
Commentary post 3Q: privateeyecapital.com/3q20-updates-f…

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More from @PrivateEyeCap

Private Eye Capital Profile picture
9 Feb
$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
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 Profile picture
5 Feb
$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
Read 5 tweets
Private Eye Capital Profile picture
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...
Read 5 tweets

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