APTS - Preferred Apartment Communities

[Gregmal]

Haha yea well the preferred ultimately cost me having a 7s cost basis on a meaningful position vs 9s. Like I said earlier, took me a good few weeks, maybe more, to really kind of get into it enough to figure out a comfort level of how things are likely to play out with them in different scenarios. 

Ultimately, the crazy monetary policies have pushed everyone out the risk curve and MF is basically the new institutional T-bill. I see no scenario where any real estate does well where MF doesnt. I see no scenario where Sun Belt doesnt outperform coastal(some stocks may, but in terms of fundamentals I am talking about). What investor in their right mind wants to deal with eviction moratoriums, rent control/freezes, tax increases, lawlessness, and the "masks forever" lifestyle when you can buy into markets where businesses and people actually want to be and as a property owner you can just say "shits hot, rents going up 10%, dont like it? take a hike"? So this is ideally positioned. The entirety of it all with the preferred basically comes down to "can they tackle them on their own terms"? And I think the answer is yes. Its on their radar, if not their primary focus. The scenarios where they'd see a momentum implosion would be something like ....virus comes out of no where and governments shut everything and people think the world is ending....and that happened and it didnt kill them. From here I think they've got a handle on it and even kind of like that theyre being conservative and continuing to "keep the machine running" as they said on the call, just to have that extra liquidity lever. Even if theyre swapping out old preferred with new, the call period is now 2 years. Which gives you an idea what sort of time line they have, along with the noted $35M monthly becoming callable. As some of us discussed earlier on the "why dont they redeem more sooner" question, the answer is "they cant" because the call period hasn't rolled over. So my assumption is they'll be cranking out $200-350M preferred reductions for probably the next 3 years. After that, they'll have the "balance" Joel mentioned, and can discontinue issuance and likely issue a real traded preferred to take out the remainder of the legacy. 

[Gregmal]

https://nypost.com/2021/05/15/florida-records-quantify-number-of-defections-from-ny/

 

Dont fight momentum. 

[gfp]

Insider purchase disclosed today from a director -

https://www.sec.gov/Archives/edgar/data/1481562/000163859921000525/xslF345X03/doc4_7254.xml