Moreover, having scale is important as it keeps fixed expenses low, improving yield. REITs in acquisition mode will face a bloated expense structure in the initial years until properties stabilize and start contributing to rental income. So the goal should be to "grow quickly" to minimize the drag from general and administrative expenses.
The analyst initiated coverage Monday on American Residential with an outperform rating. He cited the management team's long experience in the real estate industry as an advantage. American Residential Properties' portfolio totaled 2,531 homes as of March 31, 2013, up from as low as 70 homes in June 2012. The company has homes in 10 states, with its largest footprint in Arizona. Nearly 86% are leased, with an additional 10% roughly ready for lease.
-- Written by Shanthi Bharatwaj New York.
>Contact by Email.Follow @shavenk
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV