Opinions
Andy Nasr
Pure Multi-Family REIT LP
RUF.U-X
COMMENT
Oct 19, 2017
$6.250
Stock price when the opinion was issued
REAL ESTATE
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COMMENT
They own apartments in the U.S. sunbelt like Dallas. They've done a good job of executing. The recent rogue takeover attempt did lead to a positive thing--the company has formed a committee to facilitate a possible sale. They own some good properties, but the stock is now expensive. Their last numbers were good. They raised rents and have few vacancies. But it's speculative now and you could lose.
REAL ESTATE
HOLD
It looked like it was going to be taken over, but it did not go forward -- which may have been the driver to the sell off last year. He owns it still and likes how it held up during the market sell off. A good defensive play with a good yield. They have holdings in Texas, where there are lots of growth opportunities. He still likes the management team. Yield 6%.
REAL ESTATE
HOLD
He has never really fully understood their business model. There has been a recent take out off for $7.61 US per share. This is a real offer and the money would be there. Prior to that they had worked with a third-party, so it is precluding them from engaging in the current offer. Looming in the back ground there could be other bidders that might come forward. He will continue to hold their position.
REAL ESTATE
Their asset class is one of the more coveted by institutions, because they are a form of lower income housing. Apartments, versus home ownership, is where a lot of people are migrating as people can’t get approval for mortgages. As a result, there has been significant rental growth in the US market, and homeownership continues to be at a multi-decade low. Hopefully that starts to reverse course, but in the interim, there is a lot of momentum for US apartments. Prefers Equity Residential (EQR-N). Dividend yield of 6%.