Despite the elevated supply of new units, healthy rental demand amid a strong labor market, favorable demographic trends and tech-enabled features poise the Zacks Equity REIT - Residential industry players like AVB, EQR and ESS well for growth.
REIT investors must pay close attention to real estate trends. The office sector remains a mess and likely will for a long time to come. Multifamily is suffering temporarily, but 2025 could be a lot better.
AvalonBay's premium high-quality assets amid favorable demographic trends is an upside. However, high supply and a decelerating effective rent change ail.
AvalonBay's stock dropped significantly during the rate hike cycle but soared when rate cut expectations began in November. Strong occupancy rates and rising net operating income highlight AvalonBay's robust performance, supported by macro trends like delayed family formation and cheaper rent versus mortgage payments. With the stock price being just 11% away from all-time highs, the dividend yield is considerably lower than its history, making the stock a hold.
AVB benefits from a solid demand for its high-quality assets, technological improvements and a healthy balance sheet despite an elevated supply of rental units.
The Fed is expected to cut interest rates later this month. This should greatly benefit REITs. Here are 2 REITs that we expect to surge in value as rates are cut.
AvalonBay owns and manages residential properties, with a focus on the West and East Coast markets. It has low leverage, strong liquidity, and a track record of good past performance. However, the current valuation and the decelerating rental rate growth create an opportunity risk for investors.
REITs are surging in value. Interest rates are likely headed to lower levels. Here are 2 REITs that should greatly benefit.
AvalonBay (AVB) is poised to benefit from high-quality assets in premium markets and portfolio diversification. It has a healthy balance sheet and is leveraging technology and scale to drive margins.
Fortune.com recently reported that renter households in the US rose by 1.9% in the second quarter, 3x the increase of homeowner households. It is the third consecutive quarter where this happened, suggesting that rental REITs to buy could be a wise investment in the year's second half.
Equity Residential bought 11 apartments with 3572 units from Blackstone for $964 million, expanding its presence in Dallas, Denver, and Atlanta. Public apartment REITs are trading below asset value, with substantial differences in pricing based on location and quality of properties. Multifamily REITs like BSRTF, NXRT, CSR, and CPT are considered the most compelling investments in the sector, but caution is advised due to potential economic downturn.
Here is how AvalonBay Communities (AVB) and Jackson Financial (JXN) have performed compared to their sector so far this year.