CLP followed its’ brother, AEC, in reporting earnings this morning before the bell. The theme is the same.
Earnings look bad, cash available to shareholders continues to swell, and FFO blows out.
AEC’s management is scared at the moment, most likely of Fannie or Freddie getting raided by the GOP in a Romney victory, which I can see from them raising a few hundo-million and bunkering down in the third quarter.
CLP doesn’t seem to care.
They’ve continue cycling their operation throughout the third quarter, completing more purchases and sales to bring their costs down while taking advantage of struggling competitors. This multi-billion dollar business (much larger than AEC), at the moment is enjoying a 96.7% occupancy rate.
Rents are rising at a 6% clip this year, uninterrupted. And looking at the state of affairs for Americans, I don’t think that’s changing. I have placed my bets on a major shift in sentiment of US citizens away from home ownership and to renting. Two years in, all data coming from multifamily properties continues to validate this. Even a surge in housing prices, I do not feel, will significantly alter the occupancy rates of quality multifamily apartment REITs.
>90% booked is here to stay, in my opinion.
Here’s my favorite highlight, from their earnings release today:
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During the quarter, the company completed construction of Colonial Grand at Hampton Preserve, a $52.2 million multifamily development with 486 units in Tampa, Florida. As of September 30, 2012, the property was 93.8 percent occupied.
Just got caught up with AEC’s latest earnings call transcript. I’m rather pleased right now.
Only risk here is another stock offering, but that doesn’t bother me too much because the cash seems mostly to be turning around into high yielding developments.
Just because they issue more stock does not mean it’s the end of the world.