- APTS was once the darling of the REIT space, certainly of the multifamily REIT space, for its focus on newly built apartments in the Sunbelt.
- But misaligned interests in management led to an overleveraged balance sheet, persistently high payout ratio, and mission creep.
- It's a shame one cannot buy just the red hot Sunbelt multifamily portion of APTS' portfolio.
- Due to using the proceeds of higher yielding office dispositions to fund lower yielding multifamily, APTS' cash flow will take a step down.
- The payout ratio remains extremely high, and even the reduced dividend looks unsafe.
For further details see:
Preferred Apartment Communities: You Have To Buy A Lot Of 'Rough' To Get The Diamond