I am brand spanking new to investing in REITS. I have bought a few books and researched a few REITS. MAA seems like a solid REIT. FFO looks pretty good. Yield is speclatular. Does anybody care to disagree?
Correct - I just didn't articulate the point very well. Point I was/am attempting to make is that there is NO single tactic which works well throughout a real estate cycle; neither development, nor acquisition, nor disposition, nor share repurchase, nor simple patience (as now). Each has its time, its season, its place. I believe that the record is showing increasingly that we exited development and construction at the proper time, after putting in that substantial pipeline, which we're now increasingly harvesting - without continually adding new development risk.
First, thank you for being a good leader by providing a steady hand on the wheel.
Mr Cates message of 6/20 was a concise description of MAA strategy. The only exception I would take to the comparison of growth vs value REITs as defined by Mr Cates is he makes an underlying assumption of constant multiple valuation on ffo. During the past two years the market has rewarded growth REITs with expanded multiples. Therefor, a 10% dividend plus 5% growth did not produce the same total value as a REIT paying a 5% dividend and growing FFO at 10%.
That said, I agree with Mr Cates as a general statement and his feeling about ever increaseing risk to maintain the same growth rate is absolutely correct. I believe MAAs strategy will prove itself over the long term and some of the "high flying" darlings of growth will suffer when the growth rate slows and the market contracts multiples. It is only a matter of time before we see the multiples change.
My hope is the course will remain the same. Mr Bolton has been in the MAA organization long enough that he clearly understands the philosophy. I just hope the Board does not put pressure on Mr Bolton to "prove" himself by initiating some new direction.
Yes, per comments included in earlier earnings releases, George will stay on as Chairman for at least one more year. Depending on his desire and the Board's will, George's role as Chairman after 9/02 may or may not change.
George, as Chairman, along with the other Board Members (each very experienced, successful and extremely capable...see Annual Report) will focus on our strategic direction for MAA, major capital allocation proposals and ultimately, my performance.
Your new CEO/Partner does indeed intend to stay in touch with this message board and communicate here from time to time. Each shareholder is important. Folks like yourself actually make up a large percentage of our shareholder base. I intend to be as open as I can (as George has done) and communicate frequently.
Having been through several real estate cycles (including the very significant Texas markets collapse in the late 1980's), I have a healthy appreciation for caution and careful underwriting when it comes to deploying y(our) capital.
Chasing "growth and glory" is not what we're about. Steady, solid growth in intrinsic value and a healthy dividend IS what we're about....now and in the future.
Can a zebra (MAA) change the color of its stripes?
Mr. Cates (MAA's CEO whom I like) posted,
"This type must continually do something: development (not always safe and sane), acquisitions (now unproductive absent favorable spreads), and portfolio decapitalization (when times turn rough with downscale portfolios, they are the first and worst hurt as decapitalization shows its impact at the property)."
"and our more recent $400+ million acquisition of a development & construction company and its properties a few years later (subsequently resold the construction and development sub, retaining the properties)."
I would think that they were a more development oriented apartment REIT when they were buying and operating a construction and development company.
Not me - and hope that you join me as an owner!
I haven't been on the page for a few weeks, and you guys were easy on me this time, with mostly queries on prior subjects already commented on. I have nothing new to add on the numerous comments/questions on preferred (but glad to confirm that it's still safe and solid as far as I'm concerned!).
As regards the question about broadband income: pull up our latest quarterly (and telephone notes)at www.maac.net and you'll see that we do not expect to replace the 3.8 cents of broadband income this year. It'll be tough to find anything to match what we gained from the dot.com world (with no capital risked), but we still expect to see solid income resume in that area - just not this year.
We'll be issuing our annual report (and posting on the web) by April 30, so I'll be silent until after that.
Thanks for your interest in MAA.
I recognize that in your last post you indicated that we should not expect to hear from you again until after April 30th, which I fully respect. I provide this question with the expectation of an answer sometime thereafter.
As a shareholder I am interested in the Company's thinking with respect to its allocation of excess capital generated by free cash flow (ie. net of required capital expenditures and reserves therefor as regards existing properties) and asset sales. I have become a shareholder because I view the shares to be undervalued at recent prices and continue to be a purchaser of these shares. As I know that the Company also holds this view, how does the company make its decision as to how to invest its excess capital? It seems to me that the current risk/reward dynamics would favor the Company increasing its investment in its existing portfolio (which investment carries few "unknowns" and can be accomplished at prices below private market prices) through repurchases of its common stock at recent prices, than in investing in new developments at private market rate costs. Secondly, it would seem to me that given the current disparity between the private market valuation of our real estate assets and the implied public market valuation as expressed by the current price of the common, there is a compelling arbitrage opportunity in which a more aggresive property sale program (ie. shrinking the portfolio size and repurchasing common with the proceeds would be the single most accretive capital activity to shareholder value, and therefore the most rationale use of shareholder capital. I recognize that the notion of shrinking a business is antithetical to most corporate managements today even if its the most rationale thing to do for shareholders, but frankly one of the things I've sensed from your posts and attracts me to the Company, is that I get the feeling that you folks are a refreshingly different breed in that you actually run the company for its owners. Thank you for your efforts on my behalf as an owner and for responding in due course.