- JMP analyst Aaron Hecht upgraded Mid-America Apartment Communities ( NYSE: MAA ) to Market Outperform from Market Perform as he sees the REIT better able to navigate volatile capital market conditions than its peers on its position as the largest pure-play Sunbelt REIT and its "impeccable" balance sheet.
- "We view NOI (net operating income) growth as the easiest mechanism for a REIT to deliver value in a rising rate environment and MAA is better positioned to achieve that goal than peers or the industry," Hecht wrote in a note to clients.
- Apartment demand is expected to increase as rising interest rates constrain single-family homebuilding. In addition, he expects families to continue migrating to the Sunbelt for affordability issues, and employers will also continue moving to the South for cost/tax savings.
- Furthermore, the short duration of apartment leases allow rents to reset faster then other real estate sectors.
- Hecht's Market Outperform rating contrasts with the Quant rating of Hold . Bot SA Authors and Wall Street have average ratings of Buy.
- SA contributor Justin Purohit also sees Mid-America ( MAA ) well-positioned to capitalize on favorable long-term housing trends in the Sunbelt.
For further details see:
Mid-America Apartment Communities raised to Outperform at JMP