NEW YORK (AP) â¿¿ Moody's Investors Service said Wednesday the improving economy appears to be boosting demand for apartments, which is translating into higher rents and occupancy rates, good signs for the companies that own the complexes. The positive trends led Moody's to place a "Stable" outlook on the multifamily real estate investment trusts, or REITs. The recession and high unemployment made it difficult for many renters to pay on time and eight of the nine companies Moody's rates in the sector reported lower net income for 2009. The companies managed to maintain adequate cash by selling assets or through stock and debt offerings, helping most avoid ratings downgrades, Moody's said. With the improving economy, Moody's said rents appear to be increasing and vacancies declining, boosting the financial prospects for the companies. The Moody's analysts said in a report Wednesday that any uptick in home sales is not likely to have a significant negative impact on apartment demand. "Given the fragile economy and much tighter lending conditions, we doubt that rental demand will be threatened by substantial pent-up demand for home purchases," wrote senior analyst Chris Wimmer. The nine multifamily REITs rated by Moody's are Associated Estates Realty Corp., Apartment Investment & Management Co., AvalonBay Communities Inc., BRE Properties Inc., Camden Property Trust, Colonial Properties Trust, Equity Residential, Post Properties Inc. and UDR Inc. Moody's has "Stable" ratings outlooks on seven. Two â¿¿ Colonial Properties Trust and Equity Residential â¿¿ carry "Negative" ratings outlooks. Shares of most of the companies closed higher Wednesday afternoon with Post Properties leading the way, up 24 cents, or 1 percent, to $24.92.
More from Opinion
Morgan Stanley Looks Like a Buy Following Impressive Q3 Execution
In the third quarter, Morgan Stanley provided evidence that it can deliver strong results, even when the macroeconomic landscape seems far from ideal.
Goldman Sachs: Should You Bet on Its Business Transformation?
Goldman Sachs is a higher-risk, higher-reward play that bargain hunters looking for a potentially successful business model transition story might want to consider.
PepsiCo: The Unlikely Growth Story Continues to Roll
Given the combination of solid execution, strong fundamentals and the diversification benefits of the stock, PepsiCo looks like a compelling buy following the company's strong third quarter earnings report.
There Will Be No Economic Collapse From a No-Deal Brexit
The EU can have Brexit and keep zero tariffs, which ought to be obvious.
Citigroup: Tread Carefully Around Bank Stocks Ahead of Earnings Season
Citigroup will probably have the robustness of global consumer activity to help it support financial results in the third quarter. But the current interest rate environment and a soft institutional services business pose significant challenges for the New York City-based mega bank.