A new guy reports-Pure Multi Family REIT
I haven't seen much coverage of this fairly new REIT;it is called Pure Multi Family REIT.It states in it's press release that "we continue to position Pure Multi amongst the top performing REITs in the country with the same property NOI growth of over 9.4% during the first quarter of the year".Pure Multi is considered a small tier REIT but it is a top performer.It is only slightly bigger than Temple Hotels and Holloway Lodging.It only has 13 investment properties but a total asset value of $455 million consisting of 3900 residential units.As they say"not too shabby".
Financially Speaking
Pure Multi does not have a large quarterly report;it is only one page and most investors would like a little more detail.But the detail they do provide shows pretty good performance.Their funds from operations (FFO) was $4.25 million for the quarter and $.116 per share in comparison to $3 million and $.12 per share for Q1 2014.The payout ratio was 78% compared to 81% in the same quarter last year.In reits the most important statistic is (AFFO) or adjusted funds flow as this is the best estimate of earnings and earnings per share.AFFO was $4.02 million(US) and $.11 per share in comparison to $2.77 million(US) and $.11 per share in 2014.The payout ratio moved from 86% to 85% on the AFFO.
Pure Multi is conservatively managed and so it is has a good leverage ratio.The debt to gross book value was 58% in 2014 and fell to 56% this quarter.So it still has room to make new acquisitions in a buyer's market.While same property average rent increased by 6% over Q1 2014.And same property rental income increased by 10%.Total rental revenue(including acquisitions) was $13 million U.S. which represents a 23% increase over 2014.This has been helped by the occupancy rate which has remained constant at around 98.5%.This indicates that their rents are seen to be reasonable in the marketplace.
The rest of 2015
The CEO adds in this report that same property income growth increased by 9.4% over 2014.But this blog is more interested in the total increase in revenues of 23%.Also Multi just bought a new property on MAY 7,2015 in San Antonio,Texas.These new acqusitions will have more impact in the second and third quarter.Also it is likely that these properties can be renovated and rents raised.Therefore look for AFFO of $ 5 million by the third quarter and AFFO per share of $.15 to $.16 per share.This will lower the price/earnings ratio and allow the stock price to move towards $7.00 to $7.25 by October.
The CEO also says that "we are excited to be moving into a new top growth market,San Antonio,Texas".And it is clear that Multi has room to make at least one more small acquisition.In this market they should expect a healthy capitalization rate and this should add to earnings.But not enough to raise the price much above $7.25.Multi has a good yield at above 6% and the reduction of the bank rate makes all REITs look more attractive for now.An increase in the American Federal Reserve bank rate will stall any price increases in 2015.But a move to the $7.00 range should be likely by the third quarter even if only temporary.
Financially Speaking
Pure Multi does not have a large quarterly report;it is only one page and most investors would like a little more detail.But the detail they do provide shows pretty good performance.Their funds from operations (FFO) was $4.25 million for the quarter and $.116 per share in comparison to $3 million and $.12 per share for Q1 2014.The payout ratio was 78% compared to 81% in the same quarter last year.In reits the most important statistic is (AFFO) or adjusted funds flow as this is the best estimate of earnings and earnings per share.AFFO was $4.02 million(US) and $.11 per share in comparison to $2.77 million(US) and $.11 per share in 2014.The payout ratio moved from 86% to 85% on the AFFO.
Pure Multi is conservatively managed and so it is has a good leverage ratio.The debt to gross book value was 58% in 2014 and fell to 56% this quarter.So it still has room to make new acquisitions in a buyer's market.While same property average rent increased by 6% over Q1 2014.And same property rental income increased by 10%.Total rental revenue(including acquisitions) was $13 million U.S. which represents a 23% increase over 2014.This has been helped by the occupancy rate which has remained constant at around 98.5%.This indicates that their rents are seen to be reasonable in the marketplace.
The rest of 2015
The CEO adds in this report that same property income growth increased by 9.4% over 2014.But this blog is more interested in the total increase in revenues of 23%.Also Multi just bought a new property on MAY 7,2015 in San Antonio,Texas.These new acqusitions will have more impact in the second and third quarter.Also it is likely that these properties can be renovated and rents raised.Therefore look for AFFO of $ 5 million by the third quarter and AFFO per share of $.15 to $.16 per share.This will lower the price/earnings ratio and allow the stock price to move towards $7.00 to $7.25 by October.
The CEO also says that "we are excited to be moving into a new top growth market,San Antonio,Texas".And it is clear that Multi has room to make at least one more small acquisition.In this market they should expect a healthy capitalization rate and this should add to earnings.But not enough to raise the price much above $7.25.Multi has a good yield at above 6% and the reduction of the bank rate makes all REITs look more attractive for now.An increase in the American Federal Reserve bank rate will stall any price increases in 2015.But a move to the $7.00 range should be likely by the third quarter even if only temporary.
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