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Multifamily REITs see Underweighting by BOA-Merrill

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Published at: www.globest.com

Jack Kern, Managing Director

Jack KernManaging DirectorKern Investment Research What is a GLG Leader?|GLG Leaders are a separate tier of Council Members with a Council Rank in the top 5%. These GLG Member Program participants are eligible for ongoing, in-depth consultative relationships with GLG clients.

REITs Slow Dance for the Street

June 30, 2009

The apartment industry is subject to a great deal of coverage, and some of it, justified or not is decidedly negative. As an industry that is subject to great challenges, it also meets property management issues with concessions and no increases at renewal. In many places, the levels of site traffic are down, but submarkets prevail in this business and the downgrading of REIT stocks in multifamily overplays the reality of future rent growth in some markets. Property prices are declining based on in-place rents and so future IRR considerations are vastly more complicated than ever before. With the downgrade of REIT securities, the vast number of shares shorted will be rewarded, but long term, apartments are stable.

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