Essex Property Trust Investment Analysis
AS OF FALL 2017,
PREPARED FOR
INVESTMENT COMMITTEE
PREPARED BY
YUAN, CECILIA
September 2017
Investment Committee
Dear Investment Committee,
Enclosed is my research findings regard the Essex Property Trust REIT. In this report, my focus is the calculation of current NAV and projection. I utilized all available resources and consulted with experts to provide analysis with supporting statistics for you to make thorough a real estate investment decision.
I wish you enjoy this report as a useful tool to your real estate needs. I would like to assist you in the best way we can. Please do not hesitate to contact me should you have any question regarding
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Essex Property Trust, Inc. was founded in 1971. The headquartered is in Palo Alto, California. Essex Property Trust engages in the ownership, operation, management, development, acquisition, and redevelopment of apartment communities, as well as commercial properties. On March 31, 2012, the company owned or had interests in 158 apartment communities; 5 commercial buildings, and 5 development projects. Its communities are located in Los Angeles, Orange, Riverside, Santa Barbara, San Diego, and Ventura counties in southern California; and the San Francisco Bay area in northern California, as well as in the Seattle metropolitan area. The company has elected to be taxed as a real estate investment trust.
Based on the NAV calculation, the NAV is $240 while the market price (9.28.17) is $250. Therefore, it is priced at a premium.
The paper will analyze internal reasons by vacancy rate, external acquisitions, and the leverage. For external reasons, the paper would discuss the impact of rising interest rates. Besides, rising home prices are exceeding the growth in multifamily
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There are two outcomes. First, it makes it tougher for current renters to buy a home. What’s more, it may eventually present a condo opportunity for ESS since about 9k of its units are condo-mapped.
PART IV
INVESTMENT RECOMMENDATION
Based on all the previous analysis, I would not recommend investing in ESS REIT currently or in the near-term.
First, the NAV is $259.82 while the market price is $250. It is clear that the stock is being traded at a premium. Second, for the internal reasons, there’s 27% vacancy, and it brings uncertainty in the future revenue. In addition, there’s much of this growth has come from external acquisitions, and the leverage is as high as 45%. Those are the factors increasing risk. Besides, the management team average age is too old, and that may lack creativity and energy. In the end, that will influence company’s performance.
For external reasons, the rising interest rates can hurt REITs in many ways. What’s more, rising home prices are exceeding the growth in multifamily NOIs.
Please feel free to contact us should you have any question regarding this
When foreign buyers empty purchase their properties, there is no money being spent in the community and little money being put back into the area’s economy. When foreign investors purchase property in Ontario, there is no concern about the province’s population or economy. They just have concerns about their personal investment and gain. Foreign investors’ main concerns are their return on their investment, not on the province’s prosperity. In addition, with foreign buyers and empty buying comes the lack of opportunity and execution of infill.
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This change has brought both positive and negative impacts but is definitely positive in regards to the economy. Properties are being renovated and becoming luxury homes or investment properties. The new tenants of the properties are of higher socio-economic classes which promotes development. This has caused the value of the homes and overall suburb to drastically change in just a matter of years with a prime example again shown in source 1. The property was sold in February of 2016 for $3.175 million and is selling again this year for $4.5 million .
Looks like someone has been token tips from Oprah “You get an affordable house, you get a house, and you get a house. EVERYONE GETS A HOUSE!!! ”. Whether or not this act can l reverse the damage done by gentrification, now that 's a whole other
The construction of this project would not help only those future occupants of the homes, but also the people hired to construct and plan the project. Affordable is a necessity in today’s economy. Many people struggle to pay off their mortgage, or to even pay their rent. Affordable housing would help out many of the people fighting to keep up with hefty bills. It would also help out those who have lost their homes to rent increases due to gentrification.
The opportunities in the real estate sector was also why Canadian companies balanced their investments between stocks, bonds, and loans on real
These could be anything from structural issues to financial matters such as taxes and insurance rates. It’s important to look out for these signs before making an investment in real estate, as they can save you time and money in the long run. It’s important to investigate any potential problem areas before investing so that you can make sure your investment is well-protected and secure. Purchasing a house in Texas - Texas real estate market
Many Americans are also having an easier time than before finding a job after graduating from college and are ready to move out and start a new life. The prices of the homes have gone up by $600 since the previous month. With so many people wanting to buy a new home, homebuilders raise the prices of the home. And property owner also raise their prices due to the demand.
So is inventory as builders rebound from the downturn. Prospective tenants also are more confident taking large financial risks such as moving for jobs, retirement or to pursue new careers and dreams. The folks at GOBankingRates.com surveyed 61 of the 100 most populous U.S. cities to “build” top-15 lists of the best and worst cities in which to own investment property.
In major areas like Los Angeles and especially San Francisco, longer term residents are paying way less than new homeowners, and that says a lot since California is the third most expensive real estate market, behind Hawaii and Washington D.C. Older residents especially are reaping the
But they strictly wanted the property to remain a residential property with minimum to no commercial use. Since this was not going anywhere we decided to talk about our other concerns. Price also seemed to be a big point of conflict between us. The seller expected to receive twenty million dollars, more than their alternative offer of nineteen million dollars from Quincy Market. I knew my reservation price was twenty million dollars hence I did not proceed further.
NSE has 63 listed companies with four market segments namely: the main investment market segment, the alternative investment market segment, the growth and enterprise market segment and the real estate investment trust. The main investment market segment is for companies with fully paid up capital of sh. 50 million and net assets of sh. 100 million while the alternative investment market segment is designed to assist medium sized companies that require access to capital and public platform to continue growth. The growth and enterprise market segment provides an opportunity for small and medium sized companies to list within a regulatory environment designed specially to meet their needs and the real estate investment trust (REITS) has two sub-segments;
Also, home ownership increases the amount of care people have upon the property owned (Gordon 2004). However, one disadvatantage that affordable housing poses is that more and more people are being priced out of home ownership (Shelter 2015). This means that the rent of house increases and more people are competing for every single
Making investment in real estate is one of the most profitable money making opportunities. However, many investors make certain mistakes while investing in real estates. For example, many new investors approach this kind of investment with the mentality of becoming rich as fast as possible. Due to this wrong mindset, they often lose a substantial amount. Even experienced investors hire mentors or coaches to avoid deadly real estate investment mistake.