Sun Shines for BRE Properties

The Southern California apartment market had an impressive 2005, as rents and occupancies rose because of strong job growth and a lack of new supply. A new report suggests that this year's fundamentals will be even better, and this bodes well for BRE Properties (BRE Quote).

The San Francisco-based real estate investment trust generates more than a third of its rental income from apartments in Los Angeles, Orange County and the "Inland Empire" east of Los Angeles. The rest of the REIT's portfolio is centered on San Diego, San Francisco and Seattle, with lesser exposure in Sacramento, Denver and Phoenix (the company is in the process of selling off many of its properties in the latter two markets).

Currently, the Southern California apartment market (Los Angeles, Orange County and the Inland Empire) is seeing a 97% occupancy rate, and that will help push rents up another 6% to 7% in 2006, according to the USC Casden real estate forecast released Thursday by the USC Lusk Center for Real Estate. ...