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On 10-06 Wachovia Upgraded BRE from Underperform to Market Perform. Wachovia said BRE is among the only four companies from the apartment sector trading under their private market value (PMV). PMV is the value of a company if each of its parts were independent and publicly traded entities. The brokerage estimates BRE's PMV at $64 a share. The stock closed Monday at $60.40. The apartment sector is trading at an average premium of 2.4% to PMV, Wachovia added. On 10-12 Bear Stearns cut Sunstone Hotels [SHO] to peer perform from outperform, citing valuation and limited earnings upside potential in comparison to other lodging peers. Bear Stearns also cut HIH from Outperform to Peer Perform and HST from Outperform Peer Perform. On 10-24 JMP Securities Downgraded HIH from Market Outperform to Market Perform. On 10-27 Morgan Keegan Initiated coverage of AHT at Market Perform, EHP at Market Perform, KPA at Market Perform, and WXH at Market Perform. On 10-24 KeyBanc Capital Mkts / McDonald Initiated coverage of PPS at Underweight. On 10-31 RBC Capital Mkts Downgraded PPS from Outperform to Sector Perform. On 10-17 AG Edwards Initiated coverage of EDR at Buy. On 17 Stifel Nicolaus Downgraded EHP from Buy to Hold. On 9-21 JP Morgan Initiated coverage of AVB at Overweight. Multifamily Rents Poised for Growth Bailey Webb, Costar.com 10-25 A recent Citigroup REIT report suggests that the multifamily sector is poised for 6% to 7% rent growth per year over the next four years, with certain markets, such as Miami, San Jose and Northern New Jersey, in line for 9% rent growth annually. For markets with low barriers to entry -- Texas, for example -- Citigroup predicts slower rent growth, perhaps as low as 2% annually. Of course, a softening housing sector is one caveat in Citi's report that seems to be coming to fruition, but a number of metrics and trends still suggest a surging multifamily sector. Archstone-Smith's third-quarter earnings, reported this week, paint a similar picture. The Denver-based REIT, with properties in core markets across the U.S., posted a same-store revenue increase of 7.3% in the third quarter, the 10th consecutive quarter of revenue growth. Several multifamily REITs -- Post Properties, Equity Residential, BRE Properties -- post earnings next week. No doubt the for-sale housing market is cooling. The National Association of Realtors reported this week that sales of previously owned homes fell by 1.9% in September, the slowest sales rate since January 2004. The NAR also reported that the median home price fell 2.5% to $219,800 compared with September 2005. A cooling housing market, with prices and rates declining, usually does not favor the multifamily sector, but a number of other factors are at play, as well. The Citigroup analysis, authored by REIT analyst Jonathan Litt, points to the following conditions: · The gap between the cost of owning vs. the cost of renting as a percentage of median household income is about 15%, suggesting likely apartment rent growth. · The median cost of owning has risen 50% since 2000, while rents on a national basis are only recently achieving pre-recessionary levels. At the same time, median household income has increased 10%. · Based on national median household income, rent as a percentage of income has declined from a peak of 27% to 24.3% today. This analysis does not support investment in markets such as Riverside, Orange County, Los Angeles, Dallas and Baltimore where rent as a percentage of median household income is already at peak levels. Another factor that figures prominently in the multifamily sector's future: so-called Echo Boomers, children of the baby boomers, an estimated 72 million of them, born from the late 1970s through the 1990s, the oldest of whom recently entered the work force. "There are significant numbers of people coming out of college and entering the workforce who won't be able to afford the luxury price point and, initially, who won't be interested in buying," said Nicholas Lizotte, acquisitions director at Irvine, Calif.-based Atherton-Newport, a privately held apartment investor with holdings across the U.S. Lizotte covers New York, Florida, and Washington, D.C., for Atherton-Newport, which typically invests and substantially renovates B and C multifamily properties. His analysis of Miami mirrors Citi's, as Dade County vacancies currently weigh in at around 1%. Lizotte said Tampa, one of the fastest growing areas of the country, could post rent growth of 10%. As for New York, which is not covered in the Citi report, Lizotte said the Big Apple posts rent growth of about 1% per month. "It's always difficult to find a place to live in New York," Lizotte said. Apartment rents and demand are soaring nationwide as the economy produces good jobs and people who might have bought homes a year ago settle for apartments while they wait for housing prices to tumble. In the quarter ended Sept. 30, the average advertised rent reached $978, up 3.9% over the year-ago period, according to an analysis of 75 markets by real estate research firm Reis Inc.. Some of the biggest increases were seen in Florida and Southern California. Meanwhile, the nationwide vacancy rate for rental housing dropped to 5.4% during the quarter from 6.7% in the same period of 2004. In Houston, the influx of people displaced by Hurricane Katrina helped push vacancy rates down from 10.8% to 6.3%. In five counties around the San Francisco Bay, rents rose 7.5% in the third quarter to an average of $1,443, according to research firm RealFacts. In Southern California, the average rent paid in September in Los Angeles and Orange counties rose 7.4% to $1,546, RealFacts said. (Alex Veiga, AP 10-26) HME Raises Dividend Primezone 10-27 Home Properties declared a regular dividend on the Company's common shares of $0.65 per share for the quarter ended September 30, 2006, an increase of 1.6 percent over the Company's prior quarterly dividend of $0.64 per share. EDR Cuts Dividend Primezone 10-10 Education Realty Trust announced that its board of directors has approved a quarterly cash dividend of $0.205/share for the quarter ended September 30, 2006 [the prior div was 29.8 cents]. The dividend will be payable November 7, 2006, to shareholders of record as of the close of business on October 24, 2006. ENN, HST & HIH Raise Dividends Equity Inns announced its quarterly cash dividends of $0.23/share. ENN's dividend is now 21% more than our second quarter 2006 dividend and 35% higher versus the amount distributed this time last year. Host Hotels & Resorts announced a dividend of $0.20/share, representing an increase of over 17% from the prior quarterly dividend. HIH declared a quarterly dividend payment of $.19/share - which represents HIH's third consecutive quarterly increase of its dividend. 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. 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