Acquisitions and dispositions
The principal objective of Post Properties’ (PPS) acquisition and disposition strategy is to achieve a high-quality real estate portfolio that garners demand from residents. In addition, the company aims to acquire properties occupied by residents with a low average age, which can provide cash flow diversification over a longer duration.
However, Post Properties is not considered very aggressive in its property acquisition and disposition strategy. The company’s new acquisitions are likely to be limited to properties that meet its quality and location requirements.
Post Properties’ acquisitions
During the past five years, Post Properties acquired three apartment communities that consist of 887 units. The company acquired one unit in 2013, which consisted of 300 apartment units, but it has not acquired any properties in 2014.
Post Properties’ dispositions
During the same period, the company sold five apartment communities consisting of 1,265 apartment units. This also includes a joint venture interest in one apartment community, consisting of 276 apartment units, which was sold in 2012. The company sold three apartment communities and some retail space consisting of 645 apartment units in 2014. The company disposed of these properties after holding them for a period of around twenty years.
Post Properties’ (PPS) focus on property acquisitions and dispositions bodes well for its healthy growth. The company expects its revenue growth to pick up further in the years to come with the addition of many new high-quality communities through acquisitions and development. The company plans to continue its practice of selective dispositions in the future when market conditions are favorable and as opportunities arise.
Other major apartment REITs such as Equity Residential (EQR), Essex Property Trust (ESS), and AvalonBay Communities (AVB) are also active in the property acquisition and disposition activities. The SPDR DJ Wilshire Global Real Estate ETF (RWO) invests 0.32% of its portfolio in Post Properties.
Continue to the next part of this series for a closer look at Post Properties’ value creation strategies.