Though it may be the smallest apartment REIT, Cleveland-based Associated Estates (AEC) hasn’t been the quietest throughout the past year. In late May, the firm announced its intention to sell 8 million of its common shares. A couple of days later, the REIT announced it earned $114.3 million for those shares, plus another 1.2 million common shares.

The move surprised some observers. “The last thing anyone expected was a deal twice the size [of their January equity offering],” says William Acheson, a REIT analyst with New York-based Benchmark Capital.

AEC used the proceeds to retire $48 million of its Series B 8.7 percent preferreds and repay $26 million in 7.9 percent unsecured trust preferred securities, according to Green Street Advisors, a Newport Beach, Calif.-based consulting and research firm. “AEC’s recent equity raises are transformational events for its balance sheet, and the company’s expanding portfolio and market cap should help it get on the radar screen of more institutional investors,” Green Street said in a recent report.

Acheson liked the move. “This is one more step toward getting their investment-grade credit rating reinstated,” he says. “There are very little reasons why these guys shouldn’t be investment grade. It was a good move on their part.”

By the end of May, AEC also moved into the acquisition fray by continuing to expand into the Mid-Atlantic with the purchase of Riverside Station Apartments, a Class A apartment community located in Woodbridge, Va. The purchase gives AEC, which has stated that it wants to expand outside of its core Midwestern markets, 1,472 units across seven properties in the Maryland/Virginia region. Acheson says the company's 6.1 percent going-in yield on the transaction and the property’s rents are 15 percent above market.

“The Mid-Atlantic market has been a market that we have targeted for some time,” AEC president and CEO Jeffrey I. Friedman said this week at NAREIT’s REIT Week in Chicago.

Friedman, who reports the first increases for both renewals and new leases in 18 months in his portfolio, says the company has effectively put boots on the ground in the Mid-Atlantic market and made inroads. He says the firm's ability to finish transactions gives it an edge. “Now the market has come to us so to speak,” he says.

To date, the company has only about 50 percent of its portfolio in the Midwest after pushing into the Southeast and Mid-Atlantic. And, it’s expecting to add even more units outside the Midwest, despite some analysts' doubts about the company’s ability to expand. Friedman eventually wants the Midwest allocation to account for only 33 percent of its portfolio.

“We believe now is the time to buy at attractive prices,” Friedman says.