CSR - Apartment REITs: Tale Of Two Americas

• Best of times or worst of times? Apartment REITs have a front-row seat to the burgeoning economic divide as the "urban exodus" continues to add fuel to the "suburban renaissance."
• While vaccines may eventually reverse recent dynamics, rental rates and occupancy levels have plunged in the high-density, coastal "shutdown cities" that employed more draconian lockdown measures.
• Meanwhile, Apartment REITs focused on Sunbelt and suburban markets delivered a solid year of FFO and NOI growth in 2020, and rental rates continue to trend higher in early 2021.
• Outside of the troubled urban metros, national apartment markets have been remarkably resilient throughout the pandemic. Apartment REITs' exposure to the troubled markets is more limited than valuations suggest.
• With gains of nearly 15% this year, apartment REITs aren't as cheap as they were in late 2020, but valuations still appear compelling as the U.S. housing industry continues to lead the early economic recovery.

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