As 2008 came to a close, a number of multifamily REITs made moves to fortify their balance sheets and portfolios for what promises to be a tumultuous 2009. Here's a look at what some of the publicly traded apartment companies did as 2009 approached.

Equity Residential

The Chicago-based REIT, which has 148,115 units nationally, added additional dry powder by firming up a $543 million secured loan with Fannie Mae. It previously negotiated a $550 million secured loan in August and a $500 million secured loan in March. Between its lines of credit and cash on hand, the company has capital to meet its needs into 2011.

"They've got a lot of dry powder and are in one of the best positions from a balance sheet perspective," says Andrew J. McCulloch, an analyst for Green Street Advisors, a Newport Beach, Calif.-based REIT consulting and research firm. "They can also use this liquidity to buy distressed assets on the cheap should the opportunity arise."

Post Properties

Atlanta-based Post, which owns 21,190 apartment units, continued pruning its portfolio by selling Post Lenox Park, a 206-unit property located in the Buckhead section of Atlanta, for a gross sales price of approximately $22.7 million. That's the company's fourth disposition in 2008.

While Post regularly develops and sells properties, there are some advantages to closing the deals in 2008. "We tried to get Lenox done in the 2008 tax year because of how the dividends to investors are calculated," says David P. Stockert, president and CEO of Post.


BRE Properties, the San Francisco-based REIT with 22,126 units, issued its 2009 guidance and, not surprisingly, it sees a gloomy 2009 with major rent declines. "Deteriorating economic conditions and supply/demand dynamics in the company's operating markets may lead to composite market rent declines ranging 3 percent to 6 percent, from peak levels achieved during 2008," the company said in the release.

This news isn't a surprise to Green Street's McCulloch. He says the pivotal issue right now is employment. "It all hinges on job growth," he says. "If you don't have job growth, rent growth is going to suffer."


Like many of its peers, UDR, which owns 44,223 apartments, took advantage of the presence of Fannie Mae. The REIT, based in Highlands Ranch, Colo., announced that it closed a $225 million secured loan by Fannie Mae. In early November, the loan increased by $100 million with the new facility maturing in 2018. UDR has five years to draw the additional $175 million of capacity.

UDR can use the line to push back maturities or even pursue distressed assets. "The closing of the line also demonstrates that debt for multifamily assets is still available and cheap," McCulloch says.


Houston-based REIT Camden Property Trust announced that it has bought back principal amounts for some of its outstanding notes. The REIT made a tender offer for face value of $470 million; the amount tendered was $108 million.

Taylor Schimkat, senior associate for Green Street, thinks the move made a lot of sense. "If they have the capacity to buy them back in the future, they might as well try to buy them back now at a discount," he says.