High Quality Multi-family REITs - EQR, CPT, ESS, AVB

[Gregmal]

Lol but they’re insolvent because dumbasses bought private reit shares at stupid prices and are now mad they can’t sell them like free trading stock!

[thepupil]

this one is out of blackstone's $30B fund BREP X which closed in 2023. 

 

I think the lower premium / price reflects the fact that this one is being bought by higher cost of capital institutional PE fund rather than the retail BREIT fee machine. 

 

While the 20% premium isn't some giant payday, it shows that public MF REITs clear private "opportunistic" hurdles (at least in this case, it clears BREP X's). 

 

this looks like a $6 billion equity check which seems pretty big for a $30B fund. Perhaps this will be done in conjunction w/ co-investment from say a SWF or they'll rapidly decrease the equity consideration with sales of some portion of the portfolio (a la the classic Equity Office Properties txn).....actually they'll probably put a bit more debt on it than AIRC has on it now so that's another way to decrease the equity check lol. 

 

https://www.wealthmanagement.com/investment-strategies/blackstone-raises-more-30-billion-giant-real-estate-fund

Edited April 8 by thepupil

[Gregmal]

Hmmm, so all those governance issues at Aimco? Think this bodes very well for AIV.

[Gamecock-YT]

 Starwood putting up the redemption gate to Sreit.

 

https://www.ft.com/content/2b375114-049e-49f4-814a-2abce846f99d

 

Quote

A $10bn property fund managed by Barry Sternlicht’s Starwood Capital is strictly limiting its investors’ ability to exit their investments as it preserves liquidity and avoids a fire sale of assets in what it believes are poor markets.

 

The fund, known as Sreit, on Thursday told investors it would restrict their liquidity rights by more than 80 per cent, limiting redemptions to 0.33 per cent of its net assets a month from as much as 2 per cent — the amount it has allowed them to redeem since its inception in 2018.

 

Sreit’s portfolio spans apartment blocks in Arizona, logistics centres in Norway and a large loan it provided to Blackstone for the acquisition of Australian hotel and casino group Crown Resorts.

 

Facing high redemption requests and dwindling liquidity, Sreit said it would increasingly gate investors because it believes the Federal Reserve will soon cut interest rates, providing for “sunnier skies” in which it would favour selling property.

 

 

[fareastwarriors]

KKR Makes Its Biggest Foray Into Apartments, Betting on Rising Rents

 

Private-equity firm pays $2.1 billion for more than 5,200 apartment units across the country

[Spekulatius]

I am in MAA, CPT and to a lesser extend SUI and they had a nice stealth rally. One thing that clear is that in many of the areas these Reits are operating the influx of people is still ongoing which means the supply bulge should be worked off in 2025/26. Renting is also much much cheaper than buying equivalent townhomes in most locations at current mortgage rates.

 

I am keeping my shares (all in IRA’s for now), I think there is more juice here imo.

 

That was a well timed trade with a one foot hurdle that @BG2008 and @thepupil pointed out, that seemed very easy to grasp.

[BG2008]

1 hour ago, Spekulatius said:

I am in MAA, CPT and to a lesser extend SUI and they had a nice stealth rally. One thing that clear is that in many of the areas these Reits are operating the influx of people is still ongoing which means the supply bulge should be worked off in 2025/26. Renting is also much much cheaper than buying equivalent townhomes in most locations at current mortgage rates.

 

I am keeping my shares (all in IRA’s for now), I think there is more juice here imo.

 

That was a well timed trade with a one foot hurdle that @BG2008 and @thepupil pointed out, that seemed very easy to grasp.

 

I remember walking on the beach and calling @gregmal and saying "dude, I don't know when this investment work, but you're buying large cap, low leverage MF REITs at a 7% cap or 6.7% or whatever it was, and you're gonna make money" 

 

Blue Horseshoe likes MAA and CPT, JK. I'm just some small fry who enjoys shooting the shit with you guys! 

 

Spek, I do agree that MAA and CPT have more juice. I also see more sellside starting to agree that 2H of 25 to 28 will be a period of good rent growth. 

[Gregmal]

Haha yea good times. It was and still kind of is one of those situations where it just seems so obvious. And baffling when you see who’s on the other side of these trades. Like you had your pick of quality and quantity, location, you name it. Getting blasted for little real reason other than “rates”. Except we were already told rates were temporary and going to be lowered in the not too distant future. That supply increase was a big one off. Pacmanification of the space was occurring. All you had to do was wait and get paid lol. 

[Spekulatius]

The bullish thing about multi family is that renting is very very affordable compared to buying a property . The lack of affordability pertains only to buying homes, but not renting. I can see some decent rent increases for a few years as these two will eventually converge. 

[Gregmal]

Stupid real estate investors...these are just a bet on lower rates!

 

Stupid David Tepper, going balls to the wall long financials in 2009 is just a bet on a bailout.

 

Smart real estate investors, just like Mr. Tepper, you're just betting that the Fed will do exactly what they already told you theyre doing. Its easy money?

 

 

 

Thats smart money versus dumb money for you!

Edited August 29 by Gregmal