|
Yahoo Daily #s Apartment Hospitality Office Industrial Retail Mall Health Triple Net M-F Pref NAREIT Index Factoids Regional Banks Regional Banks Prior Updates Q2-09 Updates Q1-09 Updates Q4-08 Updates Q3-08 Updates Q2-08 Updates Q1-08 Updates CPN CSA Globe St. ICSC Real Est. Journal Reis ReBuz RSR NaREIT NREI Property ICSC REIT Cafe REIT Week REIT Net NAIOP ShopCntrsToday ShopCntrWrld Ind & Office Realtors Yahoo Sortable REOC List Yahoo Stock Screen Stock Charts |
On 5-26 UDR announced a div cut. On 5-01 AIV cut div [again]. On 5-06 CPT cut. On 7-29 EQR cut. On 7-30 BRE cut. Yield in spreadsheet are based on the Q2-09 div. HST and SHO has suspended the Q2-09 div Apartment Glut Expands , WSJ 10-06-09 Apartment vacancies hit their highest point since 1986, surging in cities from Raleigh, N.C., to Tacoma, Wash., as rising unemployment continued to chip away at demand during the traditionally strong summer rental months. The U.S. vacancy rate reached 7.8%, a 23-year high, according to Reis Inc., a New York real-estate research firm that tracks vacancies and rents in the top 79 U.S. markets. The rate is expected to climb further in the fall and winter, when rental demand is weaker, pushing vacancies to the highest levels since Reis began its count in 1980. Meanwhile, the air leaving the market is driving rents down, most sharply in markets that had been chugging along until a year ago, when unemployment accelerated. Driving the change is the troubled employment market, which is closely tied to rentals. With unemployment at 9.8% -- a 26-year high -- more would-be renters are doubling up or moving in with family and friends during periods of job loss. Landlords have been particularly battered because unemployment has been higher among workers under 35 years old, who are more likely to rent. Nationally, effective rents have fallen by 2.7% over the past year, to around $972. "When job losses stop, rents will firm and occupancies will firm," said Richard Campo, chief executive of Camden Property Trust, a Houston-based real-estate company. The second and third quarters typically are the strongest periods for rental landlords because they are popular times for people to move. But this year, "vacancies just continued rising," said Victor Calanog, director of research for Reis. During the third quarter, vacancies increased in 42 markets, improved in 26 markets and remained unchanged in 11 markets. Omaha, Neb., saw the largest rise in vacancies, with the rate rising 1.1 percentage points to 7.4%. Other big rises were seen in Memphis, Tenn., Indianapolis, Raleigh and Tacoma. The deteriorating rental market comes amid some signs of stabilization in the housing sales market. An $8,000 tax credit for first-time home buyers and investor demand helped to boost sales of low- and moderately priced homes this summer. But some analysts warn demand could fall with the expiration of the tax credit and supply could increase with more foreclosed homes hitting the market. While a housing recovery could lead the best quality renters to move out and purchase homes, the move-out rate isn't expected to surpass levels seen during the housing boom earlier this decade. Mortgage credit standards have tightened considerably since then, which should keep more renters in place. Apartment owners ultimately could gain from the housing bust because the U.S. home-ownership rate has fallen as foreclosures rise. But the housing bust has also flooded some of the most overbuilt housing markets with new apartment inventory as developers have converted unsold condominium developments into rentals. Reis projects that the vacancy rate will peak at well above 8% in mid-2010. Loans on apartment buildings have led the real estate industry in defaults with hotels a close second. These types of properties have short leases and downturns show up quickly. But the tough times for both sectors do not bode well for the rest of the commercial real estate industry, where longer leases can mask falling market rents. "It makes me wonder whether the avalanche is on its way for office and retail (real estate) unless things change really quickly and really drastically," Victor Calanog, Reis director of research, said. Reis still expects the U.S. apartment vacancy rate to pass the 8% mark by perhaps next quarter but certainly by next year, Calanog said. That would make it the highest vacancy rate since Reis began tracking the market in 1980. In the third quarter, the U.S. apartment asking rental rate fell 0.5% to $1,035 per month, the fourth consecutive declining quarter. Factoring in months of free rent and other perks landlords have been using to lure or keep tenants, effective rent fell 0.3% to $972, also the fourth consecutive quarter of declining rent. "We have not seen that before," Calanog said. "Vacancy could be worse if landlords didn't realize fairly early on that this end game was not going to end well and lowered rents really quickly," he said. Reis does not foresee a turnaround in the apartment market until at least the second quarter of 2010 at the earliest. "That turnaround may be very tepid," he said. "It might just be that vacancies are flat." Complicating the problem is the ongoing supply of new buildings. Reis expects more than 100,000 units to come to the rental market through 2009. Of that, 73,000 units have already come online in the first three quarters of the year and were on average 42 percent vacant. In New York, the largest U.S. apartment market, the vacancy rate fell 0.10 percentage points to 2.9 percent. Effective rent fell 0.9 percent to $2,657 per month. "With job markets still being lost at the national level and with New York being relatively more dependent on the still-embattled financial services sector, it may take a few more quarters before we see rents bottoming out in the Big Apple," Calanog cautioned. Some of the worst markets, such as those in South Florida and California, saw significant rent declines but they did not register effective rent declines of over 2 percent as they did in the second quarter. U.S. apartment vacancies near historic high Ilaina Jonas, Reuters 7-08-09 The vacancy rate for U.S. apartments reached its highest level in more than 20 years in the second quarter and could soon exceed record highs if the recession persists, Reis said. The national vacancy rate rose to 7.5%, the highest since 1987 and an increase of 1.4 percentage points from last year, according to a report Reis released on Wednesday. The record high was 7.8% in 1986. "We are reaching that historic high very quickly," said Victor Calanog, Reis director of research. Of the 79 markets tracked by Reis, 45 showed an increase in vacancies. The second-quarter vacancy rate was 0.20 percentage points higher than in Q1-09 and up from the cyclical low 5.5% reached in 2006, Reis said. The U.S. recession has taken a toll on the U.S. apartment market, which largely relies on employment growth to fuel demand. Its largest tenant group, 18- to 24-year-olds, has been hardest hit by rising unemployment. Meanwhile, the apartment buildings sector has led all commercial real estate categories on loan defaults. Q2-09 asking rent fell 0.7% from a year earlier to $1,040 a month, and 0.6% from the prior quarter, the largest single quarterly decline since Reis began tracking quarterly data in 1999. When free months of rent and other incentives landlords are using to lure tenants are factored in, effective rent was down 1.9% from the prior year and 0.9% from the first quarter to $975, Reis said. The combined decline for the first half of the year was the largest since Reis began tracking the data in 1999. Effective rents were down 2.9% in San Jose, the sharpest quarterly drop, to $1,430 a month. New York City had the largest 12-month rent decline, at 5.8%, to an average of $2,680. To maintain occupancy, many landlords, including EQR, AIV, AVB and MAA, have sacrificed rental income and boosted concessions. For example, in New York, the largest U.S. apartment market, vacancies fell 0.5 bps points to 2.9%, despite a 1.7% decrease in rent to $2,679 compared with just the prior quarter and a 4% fall compared with last year. In other areas, such as Las Vegas, San Francisco and San Jose, California, effective rents dropped more than 2% from the prior quarter. From 2000 to 2003, around 30% of renters who moved out of apartments were becoming home buyers, while just 15% of move-outs left to buy homes during the first quarter of 2009, AvalonBay Communities Chief Executive Bryce Blair told investors at a real-estate conference last month. There are signs that the shadow inventory [foreclosed properties and condominiums for rent] may be leveling off. The number of vacant-housing units for rent declined to less than one million in the second quarter, from more than 1.1 million through most of 2008, according to Ron Witten, who runs CBRE Torto Wheaton Research. Nationally, the picture may grow worse as the year progresses as Reis expects more than 100,000 units from new construction to come onto the market by the end of the year. Some 47,000 units have already come on line this year. "With general expectations of an economic recovery pushed back to early 2010 at the earliest, it seems likely that apartments will have to endure a few more quarters of distress, lower rents and higher vacancies," Calanog said. More on Apartment Vacancy Rates Even as Rents Drop Nick Timiraos, WSJ 7-09-09 Rents fell the fastest in markets that have shed white-collar jobs, such as New York and San Jose, Calif., and in markets where many foreclosed homes and condominiums have been turned into rental property, including Las Vegas and Orange County, Calif. Of the 79 markets tracked by Reis, 45 showed an increase in vacancies. Effective rents were down 2.9% in San Jose, the sharpest quarterly drop, to $1,430 a month. New York City had the largest 12-month rent decline, at 5.8%, to an average of $2,680. Generally more rental units turn over during the spring and summer than in any other time of the year, which means that the declines could have an outsized impact on revenue for apartment owners. "Everybody expected spring leasing to save apartment landlords. That hasn't happened," said Victor Calanog, director of research at Reis. The housing downturn initially offered landlords the chance to lure troubled homeowners into the rental market. But the pace of job losses shattered any inroads that apartments might have gained from the housing bust. Apartment vacancies began to rise at the end of 2007 before accelerating further as the economy deteriorated last fall. Meanwhile, shadow inventory of foreclosed properties and condominiums for rent continues to compete with rental apartments in the most oversupplied housing markets. While rental demand grew by 2.1% during the first quarter, apartments didn't benefit, in part because former homeowners chose to live in vacant homes for rent, said Gleb Nechayev, senior economist at CBRE Torto Wheaton Research. There are signs that the shadow inventory may be leveling off. The number of vacant-housing units for rent declined to less than one million in the second quarter, from more than 1.1 million through most of 2008, according to Ron Witten, who runs a Dallas-based apartment-research firm. Falling home prices could hit landlords in two ways. They could force landlords to lower rents to keep up, and could spur some renters to purchase homes. Still, the number of renters who move out to purchase homes isn't expected to surpass levels seen during the housing boom earlier this decade. From 2000 to 2003, around 30% of renters who moved out of apartments were becoming home buyers, while just 15% of move-outs left to buy homes during Q1-09, AVB Chief Executive Bryce Blair told investors at a real-estate conference last month. Markets with better employment prospects saw modest rent growth during the second quarter. Effective rents increased in the second quarter by 0.3% in suburban Maryland and in Washington, D.C. Barclay's Lowers Ratings on Lodging Stocks AP 7-01-09 Barclays analyst Felicia Hendrix lowered the lodging sector rating to a "Negative" rating from "Neutral." She also cut her ratings to "Underweight" from "Equal Weight" for three major hotel companies: Starwood, Marriott International and Choice Hotels International. Hendrix said the fundamentals of the hotel industry have been "so weakened by the economic downturn" that a recovery will likely "significantly lag" an economic resurgence by far more than 6 months. "While the industry declines should be less negative next year, we do not expect to see positive growth until at least 2011," she said. Among the problems facing the industry, Hendrix cited margin pressure and ongoing weakness in room rates. She also noted that declining supply may help occupancy, but it will hurt hotel managers and franchisers who rely on unit growth to drive revenue. Hendrix said hotel property foreclosures and potential bankruptcies are another risk. Hendrix maintained an "Equal Weight" rating on Host Hotels & Resorts Inc., arguing that its stock already trades at a significant discount. Hotels Shrug Off Bad News A.D. Pruitt, WSJ 8-24-09 During the past month, even as fundamentals for the lodging industry have gone from bad to bleak, hotel stocks have outperformed the broader stock market. The stocks of hotel companies that are structured as real-estate investment trusts were up 11% during the past three weeks and 34% since the beginning of the year, according to the National Association of Real Estate Investment Trusts. Such gains far outpace the 6% year-to-date gain for all REITs and the 12% rise by the Standard & Poor's 500-stock index. The breadth of the gains for hotel companies is stunning considering analysts continue to project lower revenue and declining profits. PKF Hospitality Research projects that revenue per available room, a key performance measurement in the hotel industry known as revpar, will decline 18.5% in 2009 and 2.7% next year. The firm also anticipates average daily room rates will drop 10.4% this year and 3.1% in 2010. While those projections would normally be interpreted as bad news, some investors see some positive signs in the data. "The viewpoint is that it's not getting better for a while [but]...it's getting less bad quicker," said Thomas Bohjalian, senior vice president and portfolio manager at Cohen & Steers, a large institutional investor of REIT stocks. And, because hotel stocks tend to rise in advance of the first concrete evidence of a recovery, Mr. Bohjalian says it is key to invest early. Waiting until "the first time we have a company report positive revpar growth...that would be too late," he said. Other investors are upbeat about the hotel industry because improving credit conditions have allowed some hotel owners and operators to strengthen their balance sheets by refinancing debt or issuing additional stock. Some analysts, however, say the fundamentals don't warrant the bull run and that investors are being misguided. "You have some investors that weren't invested...at all. And then these stocks moved and they had to play," said Chris Woronka, an analyst at Deutsche Bank. "This isn't a basis for a sustainable rally, and that puts the stocks in this sector on shaky ground." Mr. Woronka said he didn't see pricing coming back in a meaningful way for at least two years. Despite cautiously optimistic comments by mgmt teams on 2Q09 earnings calls that market rents had bottomed in some metros, according to Axiometrics effective market rents in the apartment sector have declined 33bps in 3Q09, with the bulk of the decline coming in August (-24bps), which is usually a seasonally strong month. (UBS 9-28) On 9-21 R.W. Baird analyst Paula Poskon lowered her rating on Mid-America Apartment Communities, saying that going forward, the stock may not be as appealing to investors looking for growth. MAA, which is up 28 percent in 2009, has been an attractive pick in turbulent times because of its conservative portfolio, small amount of debt coming due in the next three years and safe dividend. MAA may post better-than-expected results in Q3-09, and the stock could rise above $50. Mid-America closed Friday at $47.71. "But ultimately, a year from now we expect the market to be squarely focused on growth names in advance of the expected late 2011-into-2012 recovery," Pokson wrote, and Mid-America will likely trade between $45 and $50 next September. She downgraded Mid-America to "Neutral" from "Outperform." While apartment REIT shares will see a lot of volatility from now until September 2010, she expects the stocks she covers to wind up at the same level or higher than they are now a year from now on economic recovery prospects. She raised price targets across the board. Poskon reiterated a "Neutral" rating on Camden Property Trust, Essex Property Trust and UDR. She left AvalonBay Communities at "Underperform" and maintained an "Outperform" rating on Associated Estates Realty Corp. On 9-02 Fox-Pitt Kelton boosted its rating on Equity Residential to "Outperform" from "In Line" Wednesday, saying the apartment building REITss current stock price doesn't reflect the better-than-average quality of its property portfolio and balance sheet. EQR has improved its properties in the past few years by selling older assets and buying into better-located developments on the coast, according to analyst Robert Stevenson. EQR's average rental rate of $1,342 is now 13% better than its competitors' average rate, he said. EQR also has sufficient liquidity to meet debt obligations through 2011. Given those positives, Stevenson thinks EQR's stock will stand out from other REITs. He said the sector is due for a pullback, with shares having doubled as a group since early March. When that happens, Equity Residential should do better in the stock market than its rivals, he said. On 9-15 CPT declared a dividend of $0.45/share payable 10-16 to holders of record as of September 30, 2009. On 9-16 AVB delcared a dividend of $0.8925/share and is payable October 15, 2009 to all Common Stockholders of Record as of September 28, 2009. On 9-16 PPS declared a dividend of $0.20/share payable on October 15, 2009 to all common stock shareholders of record as of September 30, 2009. On 9-17 ESS declared a dividend of $1.03/share payable October 15, 2009 to shareholders of record as of September 30, 2009. On 9-14 HST declared a dividend of $0.25/share payable on December 18, 2009 to common stockholders of record at the close of business on November 6, 2009. On 9-30 UDR declared a dividend of $0.18, payable on November 2, 2009 to UDR common stock shareholders of record as of October 16, 2009. On 8-05 ACC declared a dividend of $0.3375/share payable on August 28, 2009, to shareholders of record at the close of business on August 17, 2009. On 8-06 HME delcared a dividend of $0.67/share payable on August 26, 2009 to shareholders of record on August 17, 2009. On 8-27 MAA declared a dividend of $0.615/share payable on October 30, 2009 to shareholders of record on October 15, 2009. On 8-03 KeyBanc Capital Markets Upgraded EDR from Hold to Buy. On 8-07 JMP Securities Downgraded ESS from Market Outperform to Market Perform. On 8-07 Citigroup Downgraded HME from Buy to Hold. On 8-07 Stifel Nicolaus Downgraded BRE from Buy to Hold. On 8-14 UBS Downgraded EQR from Neutral to Sell. On 8-17 Oppenheimer Downgraded AVB and UDR from Perform to Underperform. On 7-10 EDR declared a dividend of $0.1025/share payable August 14, 2009 to shareholders of record as of July 31, 2009. On 7-29 EQR reduces dividend from $0.4825/share to $0.3375/share on its still undelcared Q3-09 dividend. On 7-30 BRE reduces dividend to $0.375/share from $0.5625/share payable on Wednesday, September 30, 2009 to shareholders of record on Tuesday, September 15, 2009. On 7-31 AIV declared a dividend of $0.10/share payable on August 31, 2009, to stockholders of record on August 21, 2009. On 7-31 Sandler O'Neill cuts ABV "hold" from "buy". On 7-21 UBS Initiated AIV at Neutral, Initiated CPT at Neutral, Initiated ESS at Buy, Initiated PPS at Sell, and Initiated UDR at Neutral. On 7-15 JMP Securities Initiated ESS at Market Outperform. 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. |