Real estate investment trusts are looking ahead to projections for the coming year and are largely positive about what they see.
Alexander Goldfarb, managing director of equity research of REITs at New York–based Sandler O’Neill + Partners, told Multifamily Executive that employment trends are a bright spot. New jobs are commonly being taken by "natural renters," while limited construction has kept pricing power in the hands of landlords.
While new development remains limited, Goldfarb did tell MFE that the market is getting closer to the end of rent-growth acceleration as income ceilings become a factor. Senior research analyst Paula Poskin, on the other hand, indicated that she does not expect income ceilings to be a major issue, even rent growth may lead to some move-outs.
Improved employment should mean more applicants who can pass tenant credit screenings and make their payments on time, a trend which allows owners and managers to be more selective.
REITs are unconcerned with fourth-quarter data, MFE notes, partly because it is traditionally a slow period and partly due to greater interest in anticipating what 2012 will bring. Despite this, the news source notes, there are some early indications that the end of 2011 was significantly better than the end of 2010.