BRE Properties, Inc. (NYSE:BRE)
The Company is a self-administered equity real estate investment trust or REIT focused on the development, acquisition and management of multifamily apartment communities in six metropolitan markets of the Western United States.
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Residential REIT's is like buying a utility with an inflation hedge. FFO is a bit rich, yes, but there are forces at work that should keep FFO stable or increasing. For one, the debt market is favorable now and for the forseable future for large real estate investors. Second, despite the supposed pending residentail housing boom that is running through the media, an increase in either property tax or income tax - or both - will give people pause to purchasing a new home. In essence, the rental market will remain strong and this market is already tight in many markets. In addition to these macro condition, many of these residentail REITs own properties in the prime / desirable locations of CBD's, where the population continues to migrate....Manhattan, LA, Denver, DC etc. In these areas, if you want commutability, you are more likely forced to live in a rental apartment/complex than a single family home.
In summary, market should be supportive to rental rates, low cost of financing, scarcity of product in prime locations, and real estate as an inflation hedge all bode well for the long term benefit of incorporating residential REITs into your portfolio....with a nice dividend to boot.
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A lot of folks who are losing homes and many more that have lost them need a place to live that does not require a morgage and 20% down.
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coz people moving to west coast
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BASED ON THE FORCLOSURES OF HOUSES, PEOPLE WILL LIVE IN SHELTERS, CARS OR RENTALS.
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All REIT's have taken a hit over the past year. This was a result of the building and purchasing boom that was enabled by the creative financing that has caused the sub-prime lending collapse.
Now, the demand for well-located, high-end apartments has risen, as the children of the Baby Boomers are starting families and prefer living in downtown areas near their jobs vs. long commutes that cost in gas and family time. This, along with stiffer loan restrictions and increasing residential interest rates has pushed demand for rental housing, which is reflected in the form of increase in rentals and rental prices.
Through BRE's geographic presence, they should be able to take advantage of this growth. In a strategy to concentrate on high-growth market the company has exited from its non-core Utah market.
Factors like a supply-constrained market, an increase in metropolitan job growth, a recent influx of condo conversions and the company’s focus on a high profile metropolitan market fuels the prospects for BRE.
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going down with the rest of them...
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