), an apartment-only real estate investment trust (REIT), has
recently completed a debt offering of $175 million worth of senior
unsecured notes to increase its liquidity. The debt issuance has a
weighted average term of 9.5 years and a weighted average interest
rate of 4.02%.
MID-AMER APT CM (MAA): Free Stock Analysis
UDR INC (UDR): Free Stock Analysis Report
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The simultaneous issuance and sale of the notes is likely to take
place in three separate tranches. These include $62 million worth
of note offering on August 31; $59 million on September 28; and the
balance $54 million on November 30, 2012.
MAA intends to utilize the proceeds from the debt offer to fund its
future acquisitions and fuel its development pipeline. Since its
inception in 1994, MAA has evolved as a publicly owned company from
a portfolio of 6,000 apartments in the Mid-South area to a
portfolio of 49,264 high-quality apartment homes spread across the
Sunbelt region of the U.S.
The company typically divides its portfolio in two tiers - larger
primary markets and lower population secondary markets. Secondary
markets often have stable fundamentals due to limited new supply.
Having a diversified presence in different types of markets helps
mitigate risk and decrease volatility in the event of a slowdown in
any one product type.
MAA's diversified market profile with its focus on solid employment
markets of the Sunbelt region across both the high-growth primary
markets and the less cyclical secondary markets provides a stable
earnings platform and mitigates operating risks.
With new supply remaining muted until late 2013 or 2014, we expect
the multifamily sector to remain comparatively stable in the coming
quarters, as renting has emerged as the only viable option for
customers who could not get mortgage loans or are unwilling to buy
a house at present.
We maintain our Neutral recommendation on MAA, which presently has
a Zacks #2 Rank that translates into a short-term Buy rating. We
also have a Neutral recommendation and a Zacks #3 Rank (short-term
Hold rating) for
), one of the competitors of MAA.