Mid-America Apartment Communities Inc. (MAA), an apartment-only real estate investment trust (REIT), has recently completed the acquisition of 'Legends at Lowe's Farm' – a 456-unit upscale apartment community in Mansfield, Texas, for an undisclosed amount. The transaction was funded with the proceeds from its at-the-market stock issuance program and credit facility.
Developed in 2008, the acquired property is located in the budding submarket of Dallas/Fort Worth, which boasts a highly-regarded school district and is home to several Fortune 500 companies. In addition, the property provides easy access to major transportation facilities and the convenience of shopping and dining through outlets of leading retailers within its proximity.
Besides its strategic location, the apartment community offers luxury amenities such as a resort style pool with lap lane, fitness and business centers, garages and other upscale interior features.
Since its inception in 1994, Mid-America has evolved as a publicly-owned company from a portfolio of 6,000 apartments in the Mid-South area to a portfolio of 48,625 high-quality apartment homes spread across the Sunbelt region of the U.S.
The company divides its portfolio in two tiers – larger primary markets and lower population secondary markets. Secondary markets often have stable fundamentals due to limited new supply. Having a diversified presence in different types of markets helps mitigate risk and decreases volatility in the event of a slowdown in any one product type.
Mid-America’s diversified market profile with its focus on solid employment markets of the Sunbelt region across both the high-growth primary markets and the less cyclical secondary markets provides a stable earnings platform for the company.
Furthermore, as ‘echo boomers’ (children of the baby boomer generation) opt to move out on their own and more renters decide to part ways with families and roommates, single-family homeownership rate across the U.S. has witnessed a continuous decline and demand for multi-family rental apartments have surged.
With new supply remaining muted until late 2013 or 2014, we expect the multifamily sector to remain comparatively stable in the coming quarters, as renting has emerged as the only viable option for customers who could not get mortgage loans or are unwilling to buy a house at present.
We presently have a ‘Neutral’ recommendation and a Zacks #3 Rank (short-term ‘Hold’) rating on Mid-America. We also have a ‘Neutral’ recommendation and a Zacks #3 Rank for UDR, Inc. (UDR), one of the competitors of Mid-America.
MID-AMER APT CM (MAA): Free Stock Analysis Report
UDR INC (UDR): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment