And Associated Estates Realty, my little diamond in the rough, has once again raised its dividend following an absolutely wonderful quarter. The move represents a 5.6% increase in payout, bringing the annual yield back up to around 5% from the days’ open.

The stock is up 2% on the announcement, but that’s no consolation.

AEC has been crushed over the last 6 months as trolling analysts and crack addicted gamblers were pissed off that the company decided it was better to control their debt than make failed bids at grand slams and gluttonous attempts at devouring the entire apartment market on nothing but a smile and a signature.

By doing things their more conservative way, not only have profit margins continued to improve, but the company’s operations have become more consolidated, lower cost, containing higher value properties, and lower influence from interest rate swings.

And, because they decided to tender their debt load, they’ve been catching ratings upgrades, which will only serve to save the shareholder more in earnings down the road.

Recently, a series of articles have come out suggesting the Multifamily REIT boom is over, because the resurge in housing prices is foretelling a collapse in occupancy and rates. A second, alternate version of this storyline suggests that because a house could, theoretically, cost less than renting an apartment, we would see a huge shift away from rental occupancy and downward pressure on rates.

Sorry, but no, that’s not how attaining mortgages works.

I continue to forecast strong outperformance from the REIT multifamily sector. And, when the market finally catches on, these stocks will have a long way to go before they’re pricing that in properly.

In the meanwhile, AEC and CLP continue to see FFO bulging. And since that’s money going straight to my pocket, I guess I’ll just have to enjoy these dividend hikes while I wait.

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Well, I was wrong about the market running higher. The futures ramped and I got excited. It’s part of the Perma-bull lifestyle.

You do some tummy crunches in the morning, then down ground up liquid lawn clippings, and finish it off with a cardio workout involving mostly mocking Keith while listening to Bob Pisani-on-tape.

(one, two, one, two, one, two…)

I jest…

But in all seriousness, I don’t really care that I was wrong. AEC and CLP are making a move higher right now, and the multifamily theme is strong.

The naysayers from this summer, predicting imminent reversal of rental occupancy and ceiling for rents have been left holding their persons, naked in the middle of the road. Higher house prices have not diminished multifamily in the slightest, most probably because those house prices aren’t exciting a huge push for real estate by renters.

Let the houses on the market trade up 2X. I don’t care. As long as AEC and CLP stay 95% occupied with a nice 4% trend in rents, I don’t give a shit what housing does.

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It’s so fortunate that the markets are back open finally. Some of us were starting to lose our minds.

I’m getting lit up in BAS. The entire position is being crushed. My losses stand at about 22% from my first purchase. Net losses are lower from averaging in.

That’s what happens when you push into distressed positions. Most of the time, you’re early, and get treated to another 20-30% of downside. You have to know you’re where you’re supposed to be, because if you’re wrong, there’s no coming back.

But the rewards can be tantalizing when you’re right. I laid out my reasoning for a huge resurgence in BAS’ stock price mid to late next year at the earliest. Sooner if speculative money gets interested in natural gas prices reflating.

I offer a hat tip to Po Pimp, who told me I was early to the trade. This one’s to you, sir.

Meanwhile, not all is bad. CCJ is running much higher, in a way that makes me think somebody talked. They’re supposed to be issuing earnings today.

AEC is flat and CLP is getting a nice bid from some positive spin off their earnings release last week. The irony that CLP is more expensive than AEC, while CLP continues to receive more hype, is not lost on me.

And silver is back above $32.

But I have no cash, in large part because I’m betting that the world can be just as irrational this year as it was last year. Or the year before that. There is no buffer between me and a drawdown, and only limited ability to buy in if we get a big selloff.

Hearing market commentators launch into explanations of the dangers coming out of Europe, or developing economies; my exact position this time last year before the huge run; is aggravating.

If this is the year that facts matter, so help me, I will be pissed.

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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:

Development Activity

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.

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