Revenue in 3Q17 increased by ~3% backed by strong growth in rental income, while its expenses grew by ~2.4%. Real estate taxes formed ~41% of the total expenses while on-site payroll formed ~22.5%.
The residential REIT sector is on the threshold of a transition period and the performance of these stocks depends a lot on the macroeconomic as well as industrial changes taking place currently.
Performance in 2Q17 AvalonBay Communities (AVB) has undertaken several development, redevelopment, and expansion projects to maintain its share in the market. It invested $400 million in new developments during the quarter. REITs such as UDR (UDR), Essex Property Trust (ESS), and Equity Residential (EQR) fund these activities with the help of debt and equity. Therefore, […]
Income generated in 2Q17 AvalonBay Communities (AVB) reported NOI (net operating income) of $367.1 million, compared with $339.6 million in 2Q16. The Northern California region reported the highest NOI of $64.6 million, followed by the New York metropolitan area, which reported NOI of $61.5 million. Development and redevelopment communities reported NOI growth of $40.1 million, […]
Wide geographical diversity AvalonBay Communities (AVB) has its assets well placed in high-demand Class A cities. These cities have soaring job growth, a high barrier to entry for competitors, and proximity to premium infrastructure. REIT peers UDR (UDR), Equity Residential (EQR), and Essex Property Trust (ESS) are repositioning their properties to Class A cities and […]
Demographic shift American demographics are shifting towards Class A cities with high-income growth and demand for residential apartments. These cities offer job prospects and proximity to offices, schools, and other necessities for premium social living. Although these cities also have high barriers to entry, more residential apartment owners are repositioning their properties in these areas. […]
Robust 2Q17 driven by rent growth AvalonBay Communities’ (AVB) total revenue of $530.5 million marginally surpassed Wall Street estimates by 0.3%. However, revenue rose by almost 6% from the year prior. Upbeat top-line growth reflected growth in development communities and stabilized operating communities. Same-store revenue rose 2.5% year-over-year. Including revenue from redeveloped communities, same-store revenue […]
Robust 2Q17 results AvalonBay Communities’ (AVB) top and bottom lines exceeded expectations, backed by higher net operating income growth of 8.1%. Factors affecting profit during 2Q17 Higher occupancy and rent growth in development communities and stabilized operating communities led to upbeat results during the quarter. Higher funds from operations expected for 3Q17 AvalonBay expects […]
During 2Q17, Equity Residential (EQR) reported higher-than-expected top-line and bottom-line results backed by robust rent growth and occupancy levels.
Equity Residential reported higher-than-expected top-line and bottom-line results in 2Q17 backed by robust rent growth as well strong demand for its apartments.
While New York exceeded management’s expectation in terms of occupancy and renewal rate growth, Boston, Seattle, and its West Coast markets performed in line with EQR’s guidance.
Equity Residential’s (EQR) 2Q17 top line of $612.3 million surpassed both the year-ago mark as well as analysts’ estimates backed by higher rent growth and demand for its properties in coastal markets.
Equity Residential reported top-line and bottom-line results in 2Q17 that surpassed analysts’ estimates backed by robust rent growth and net operating income (or NOI).
Equity Residential (EQR) is scheduled to report its fiscal 2Q17 earnings on July 25, 2017. Analysts expect it to report adjusted FFO per diluted share of $0.76.
Essex Property Trust’s (ESS) performance expectations in 2017 are reflected in analysts’ ratings for its stock. Analysts have given ESS a mean price target of $257.6.
The price-to-FFO (funds from operation) ratio is the most popular method of measuring the relative valuation of real estate investment trusts (or REIT) such as Essex Property Trust.
In order to function as real estate investment trusts (or REIT), companies such as Essex Property Trust (ESS) have to pay almost 90% of their taxable income out as dividends.
Rising optimism among citizens bodes well for REITs such as Essex Property Trust (ESS) AvalonBay Communities (AVB), Equity Residential (EQR), and UDR (UDR).
Real estate investment trusts (or REIT) such as Essex Property Trust (ESS) need to pay at least 90% of their taxable incomes as dividends or share buybacks as a prerequisite for functioning as REITs.
A slow and steady improvement in the job market and rising optimism among consumers about their economic welfare has triggered a spike in the construction sector.
In May 2017, 11 of 23 analysts covering AvalonBay Communities (AVB) stock issued “buy” or “strong buy” ratings. Eleven analysts gave AVB a “hold” rating, and one analyst gave it a “sell” or a “strong sell” rating.
General Growth Properties (GGP) has been paying dividends to its shareholders consistently in every quarter since it raised its dividend 11.1% during 4Q16 to $0.22.
Why dividends matter In order to qualify as equities, REITs like Equity Residential (EQR) are required to pay at least 90% of their taxable income to investors in the form of dividends. REITs fund their dividend payouts from rent paid by the tenants occupying their properties. These secure and continuously flowing funds in the form […]
According to preliminary results released by the University of Michigan in May 2017, the consumer sentiment index gained 3.2% year-over-year for May to date, standing at 97.7%.
In 1Q17, Southern California comprised 25% of Equity Residential’s (EQR) total revenues, 19% of its total revenues came from Washington, D.C., and New York comprised 21% of its total revenues.
In 2016, Equity Residential (EQR) completed $1.1 billion in development projects, a record for the company. It expects to complete $900 million in development projects in 2017.
Equity Residential upwardly revised its guidance for its 2016 same-store operating performance, normalized FFO per share, and some of its transactions.
Equity Residential’s total revenue for 4Q15 stood at $703.2 million, a rise of 5.8% over 4Q14. On a same-store basis, revenues rose 5.2% to $666.4 million.
Equity Residential had a total of 98,200 same-store apartment units in 4Q15 compared to 98,400 units in 4Q14. All the units were same-store apartment units.
Equity Residential’s (EQR) FFO (funds from operations) rose to $0.92 per share in 4Q15 compared to $0.87 per share in 4Q14, representing growth of 5.7%.
On a price-to-FFO (price to funds from operations) multiple basis, most major apartment REITs trade in the range of 15.8x–23.2x. EQR is trading at 23.3x.
In San Francisco, higher demand and severe development restrictions led to the sharp rise in rent. The average rent for a one-bedroom apartment is $3,500 per month.
As more and more people seek apartments, rent has also been rising rapidly. In fact, rent has been rising faster than the overall cost of living in the US.
AvalonBay’s established communities’ occupancy rate declined by 0.4% YpY to 95.3% in 3Q15. It was the lowest occupancy level recorded by the company during the last 14 quarters.
Many local governments have initiated measures to increase housing affordability. The California Community Redevelopment Law requires developers of redevelopment projects to construct 15% of the houses to be affordable for low- and moderate-income households.
HUD considers a house to be affordable if the cost of the total rent or mortgage plus utilities are ~30% or lower of the household’s annual income. This relates to a family of four earning at or below 80% of the area median income.
In 2015, new housing starts averaged 1.1 million units, up slightly from 1 million units in 2014. Over the past five years, the housing starts averaged just 876,000 units.
Looking at Camden Property Trust’s (CPT) valuation, we see that CPT shares are trading at a price-to-FFO multiple of 15.3x. The average price-to-FFO multiple for apartment REITs is 19.3x.
Wall Street (SPY) analysts expect Camden Property Trust to post an FFO of $1.19 per share for 4Q15. This translates to a healthy growth of 20.6% over the same previous fiscal period.
Wall Street analysts expect Camden Property Trust’s EBITDA to be $131.4 million in 4Q15. This compares to $114.8 million in 4Q14, representing a growth of 14.5%.
Camden Property Trust’s portfolio occupancy rate inched up marginally by 0.1% year-over-year, reaching 96% in 3Q15. In 4Q15, its occupancy rate may likely be around the same level.
Wall Street analysts expect Camden Property Trust to report revenues of $228.8 million for 4Q15. That’s nearly 4.5% higher than revenue of $219 million reported in 4Q14.
Mortgage rates in the country are still lower, and if that’s backed by solid job growth, we could see further appreciation in the housing market in 2016.
Higher home prices create an opportunity for homeowners by encouraging them to put properties for sale. This additional supply boosts the limited inventory.
Lower inventory of homes for sale in most major markets of the country is pushing home prices ever higher. The US has a home inventory of just 5.7 months.
According to the S&P/Case-Shiller Index, home prices rose 5.5% YoY in October, from a 5.4% increase in September. The iShares US Real Estate ETF (IYR) rose 1.0% on December 29, 2015.
