U.S. Markets close in 2 hrs 28 mins

The Zacks Analyst Blog Highlights: RealPage, Essex Property, AvalonBay, Equity Residential and UDR

Zacks Equity Research

For Immediate Release

Chicago, IL –October 9, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: RealPage RP, Essex Property Trust, Inc. ESS, AvalonBay Communities, Inc. AVB, Equity Residential EQR and UDR Inc. UDR.

Here are highlights from Tuesday’s Analyst Blog:

Apartment Market Continues to Shine on Occupancy, Rent Growth

The U.S. apartment market has put up an impressive performance in the past few months, successfully banking on the stellar rental-unit demand. While occupancy is hovering at a near-record level, rents continue to register a steady rise.

Per the latest report from real estate technology and analytics firm, RealPage, occupancy reached 96.3% as of third quarter 2019, with an impressive leasing activity. The figure is not only up from the prior-year period’s 95.9%, but is also close to the all-time high of 96.4% attained almost two decades ago in late 2000.

The warmer months definitely witness an uptick in apartment leasing activity. However, this year, the performance was robust, as demand was particularly strong. According to RealPage chief economist Greg Willett, “New household formation continues, and rentals are capturing a sizable share of the resulting housing demand. At the same time, loss of existing renters to home purchase remains limited relative to historical levels.”

Moreover, with the upsurge in renter demand, the number of occupied apartments shot up 118,000 units in the September-end quarter. This pace of product absorption is a whopping 24% ahead of the average demand reported in the third quarter of the previous five years.

With an uptick in occupancy, rent growth also seems to be steady. For new leases, rents were up 1.2% during the third quarter, driving the annual rent growth pace to 3% and monthly rents averaging $1,416. This comes after a solid performance in the April-June quarter.

This ushers in good news for residential REITs, including Essex Property Trust, Inc., AvalonBay Communities, Inc., Equity Residential and UDR Inc. Earlier, high apartment deliveries had curtailed landlords’ ability to command more rents, and resulted in aggressive rental concessions and moderate pricing power of landlords.

Nonetheless, considering the extent of tightening in occupancy, rent growth has not been that robust. This is because apartment owners and operators prefer to enjoy more occupancy and forego marginal rent growth, as they remain concerned with the probability of a slowdown in economic growth and apartment demand in the near term.

In addition, construction in the U.S. apartment sector remains at three-decade highs. In approximately the next 18 months, market-rate apartment properties under construction, comprising around 538,000 units, will be finished. So, things can go wary, if along with high supply of new units, economic growth also decelerates.

Wall Street’s Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com                 

https://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.