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On 6-02 Wachovia Initiated coverage of SHO at Outperform. On 6-16 Goldman Sachs Initiated coverage of CPT at Outperform. On 6-02 Wachovia Starts Sunstone Hotel At Outperform. On 6-20 HIHincreased its dividend payment to $.18/share - up 12.5% over Q1-06 payment of $.16/share and 28.6% greater than Q4-05 dividend payment of $.14/share. On 6-21 JMP Securities Initiated coverage of EHP at Market Perform. Morgan Stanley analyst Celeste Mellet Brown dropping its rating of HST to "Underweight" from "Overweight." She boosted her price target to $26 from $24. "We still believe Host is one of the highest quality names in lodging. However, we believe there are other names in our gaming and lodging universe that offer more upside," she said. Overall, the gaming and lodging industry has certain opportunities on company-specific factors, Mellet Brown said in another client note. "While fundamentals are strong, particularly for lodging, we believe expectations are very high," she said in the note. On 6-27 Robert W. Baird Initiated coverage of AHT at Outperform, Initiated coverage of ENN at Outperform, and Initiated coverage of WXH at Outperform. On 6-13 M Stanley Ups GMH Communities To Overweight From Equal. On 6-05 Merrill Lynch Starts Home Properties at Neutral. On 5-15 Citigroup upgraded Camden Property Trust (CPT) to hold from sell, saying that while the company is trading roughly in line with its peers, a premium now seems warranted given above-average same-store results are likely for the remainder of the year. On 5-16 Morgan Stanley Initiated coverage of AHT at Equal-weight. On 5-09 Wachovia Upgraded EHP from Underperform to Market Perform. On 5-05 JMP Securities Upgraded ENN from Market Perform to Market Outperform. On 5-19 Morgan Stanley Downgraded SHO from Overweight to Equal-weight. Cooling Housing Market Adds To Apartment Demand Ruth Simon, WSJ 6-09 It's no longer a renter's market. For years, rents have been flat or falling in cities nationwide - a result of the booming home-sales market, which transformed scores of renters into owners. But as the housing market cools, rentals are once again in demand, liberating landlords in many markets to raise rents at the fastest pace in years. They're also cutting back on the goodies that previously helped lure tenants, such as a free month's rent or a free DVD player. While renters have had an easy ride for years, the current bout of rent increases could prove to be a jolt for many Americans, from seniors looking to downsize to recent grads looking for their own place. Average effective rents -- or what tenants pay after taking concessions into account -- are expected to rise 3% this year, according to Reis Inc., a real-estate research firm. Rents began picking up last year after several years of softness. As recently as 2002, rents fell 1%. The pace of change varies greatly from market to market. In its survey of 69 metro areas, Reis found 60 markets with rising rents, with Florida's Fort Lauderdale, Palm Beach, Miami and Tampa-St. Petersburg and California's San Jose topping the list. It also found nine markets in which rents are flat or falling, including Buffalo, N.Y.; Charlotte, N.C.; Denver, and Omaha, Neb. Generally, rents in East and West Coast cities are expected to rise the fastest. Archstone-Smith, which owns apartment buildings in 41 cities, says it is increasing rents 8% to 10% in New York City and Southern California. And in South Florida, vacancy rates are so low that some landlords are raising rents as much as 28%, according to McCabe Research & Consulting. In Chicago, just five of 34 large apartment buildings offered concessions to renters in the first quarter, down from 19 a year earlier, according to Appraisal Research Counselors, a real-estate consulting firm. The higher costs for rentals come as strong job growth in recent years has boosted demand for apartments. At the same time, many apartments have been converted to condos, reducing the availability of rentals. Tenants forced out of units being converted to condos often have trouble finding another apartment with a similar rent, real-estate agents say. The squeeze comes as average vacancy rates dropped to 6% in the first quarter from as much as 7.4% at the end of 2003, according to Property & Portfolio Research Inc., giving landlords more power to boost rents than they've had since the beginning of the decade. Camden Property Trust says it is raising rents in all of its 22 markets. In Miami, Camden now charges an average of $1,319 a month for its apartments, up 7.4% from $1,228 in the first quarter of 2005. In Houston, its average rents rose $20 to $800 over this same period, the company says. Freebies are vanishing, too. United Dominion Realty Trust Inc., which operates in 17 states, says the amount it spent on free rent and other concessions fell 26% in the first quarter from the year-earlier period, to roughly $12 million, or about $265 for each new tenant. "Over the next 12 months, we expect that number to shrink practically to zero," says Thomas Toomey, the company's chief executive. Even with the latest price increases, renting remains a bargain compared with owning in much of the country. In Las Vegas, Los Angeles and Seattle, the monthly cost of renting the average apartment was roughly half what it would cost to own the median-priced home in the first quarter, according to an analysis prepared for The Wall Street Journal by Torto Wheaton Research, a unit of CB Richard Ellis Group Inc. The cost of owning is based on a 15% down payment and a 30-year fixed-rate mortgage; it doesn't include property taxes, insurance or tax deductions. Major landlords will sometimes offer a better deal on just a handful of units. At AvalonBay Communities, which owns apartments in a number of major markets, concessions have fallen 50% over the past year. But tenants may still get a break on certain apartment models that are moving more slowly, the company says. And even in some cities where overall rents are rising, individual investors having trouble selling condos and single-family homes are rushing to rent them instead. In Chicago, enterprising tenants can rent a luxury condo for about the same amount per month as a unit in an older apartment building. "It's harder to track those down, and you don't get the same management attention as you would in a rental building," says Ron DeVries, vice president of Appraisal Research Counselors in Chicago. In some markets, such as South Florida, vacancy rates for large apartment buildings are down and rents are up. However, the supply of condos and homes available to rent in the region is growing as investors clamor to rent out properties they are having trouble selling. Owners of large rental buildings fear that this "shadow supply" of rental properties could eventually put a lid on rent increases in some markets where speculation has been rampant. "We're having a flood of rental properties coming back into the market simply because the investors who bought with the intention of flipping them have not been able to," says Brenda Gerdes, owner of Management Specialists, a property-management firm in Port St. Lucie, Fla., where average rental rates for properties owned by individual investors have fallen about 20% over the past year. Boston Apartment Update Kimberly Blanton, Boston Globe 6-24 Rents are rising around Boston for the first time in five years. The average monthly rent in greater Boston climbed to $1,355 this spring, up 3.6 percent from a year earlier, according to a survey by Northeast Apartment conducted over four weeks during late March and early April. The survey stretched as far west as Worcester, and from New Hampshire to Rhode Island. The rental rate is now the highest it's been since 2001 and halts four years of declines. The national market also peaked in 2001 but has started to rise again recently, too. Rents are higher despite the addition of 3,500 apartments to the market statewide last year, a recent high, said Chris Reilly, vice president of Equity Residential, a real estate investment trust that owns 9,800 apartments in Massachusetts. Equity Residential has been able to raise rents at two of its Boston buildings, Emerson Place and Longfellow Place, 10% to 15%. Equity Residential Announces Sale of Its Lexford Housing Division for $1.1 Billion BusinessWire 6-28 Equity Residential announced that the company has agreed to sell its Lexford Housing Division to affiliates of Empire Group Holdings LLC, a privately held company. The Lexford Housing Division is comprised of 289 properties, built between 1976 and 1989, consisting of 27,115 apartment units located in ten states and a property management business, consisting of approximately 800 employees, headquartered in Columbus, Ohio. The purchase price is equivalent to $40,052 per apartment unit. The capitalization rate, after capital replacements of $400 per apartment unit, on 2006 net operating income is 7.4 percent. Equity Residential purchased Lexford Residential Trust, then consisting of 36,609 apartment units, in 1999 for approximately $738 million, or $20,155 per unit. The company expects to record a total book gain of approximately $430 million. This sale will result in FFO dilution of approximately $0.05 per share in 2006. On an annualized basis, FFO dilution will be approximately $0.10 per share. However, this dilution will be partially offset by a reduction in capital expenditures of approximately $18 million or $0.06 per share because the proceeds from this transaction will likely be invested in significantly fewer apartment units. On 6-30 Equity Residential said it would sell up to 1,488,663 shares in a secondary offering, according to filing with the SEC. The majority of the shares being offered for sale, more than 1 million, are held by SSB Tax Advantaged Exchange Fund IV REIT Inc., the filing said. Hotel Update Alex Tarquinio, NY Times 6-25 In April of this year hotel occupancy rates in the United States surpassed the last peak, reached in February 2001. Now many industry analysts are debating how much longer the good news will last. "The lodging industry is driven by supply and demand imbalances," said Harry Curtis, a stock analyst at J. P. Morgan Securities. Now, Mr. Curtis said, the gap between growth in demand and growth in supply is the widest he has ever seen. "That's giving hotel companies unprecedented pricing power," he said, "that should last until supply growth increases over an extended period of time, like three to four years." Mr. Smith said he thought that the hotel business would remain healthy for some time. A combination of high construction costs and the scarcity of building sites in many urban markets has limited the increase in hotel rooms to 0.4% over the last 12 months, while demand for rooms is rising 3% a year. He said he expected supply growth to increase to 1.5% in 2007 and 2% in 2008. NOTE: Although the tables above are checked and double-checked for accuracy, and may at times be 100% accurate - do NOT count on that. Please confirm through your own research any numbers on which you are to make a buy, sell or hold decision. Most sites giving this kind of data would say that it's information is for entertainment purposes only. I will not presume that you are that masochistic. And even accurately replicated and freshly retrieved FFO numbers are often stale. Home Page Previous REIT Update Top Sites |