A Net Buyer of MF Assets (More or Less) Begins With A $61M Deal in Fredericksburg, VA

The Apartments at Cobblestone Square

FREDERICKSBURG, VA—In the grand scheme of things, one acquisition by the Germantown, TN-based Mid-America Apartment Communities is not going to nudge the needle one way or another with the REIT. It owns or has a stake in, as of December 31, 2015, 79,496 operating apartment homes in 254 communities in 15 states. Much of that is due to its 2013 merger with Colonial Properties Trust, which created one of the largest multifamily REITs in the market with a market cap of $8.6 billion. Still, a purchase by MAA is telling at this point in the market cycle when so many believe it as nearing its peak.  And, in the case of publicly-owned REITs at least, even if they don’t think the marketing timing is right to sell, their balance sheets are likely urging them too. With this disconnect between public and private property valuations if REITs are not outright being taken private, they are selling off assets to take advantage of this disconnect. But MAA is buying. Specifically, it has acquired the Apartments at Cobblestone Square in Fredericksburg, VA, for $61.3 million, or $195,064 per unit for the 314-unit property. And it will continue to make acquisitions throughout the year, its executives said during a recent earnings call held in February 2016. The REIT expects it will be a net buyer of assets, give or take, for 2016.  Roughly, its acquisition volume for 2016 should total some $300 million to $400 million of purchases. It plans to match fund these investments with $200 million to $300 million of multifamily dispositions and $30 million to $60 million of commercial assets and land dispositions. MAA will begin its acquisition activity for the year, according to comments made by CFO Al Campbell during the earnings call “beginning somewhere in March, maybe a $40 million to $50 million deal a month through call it, October-ish.” The dispositions will begin more toward the mid part of the year as the REIT tries to match fund those deals as much as possible, he added.