The Archstone transaction has had no impact on the multifamily business from an operational or supply-and-demand perspective. There has been an impact on the price performance of the public multifamily companies. The Lehman bankruptcy estate owns nearly $4 billion of EQR and AVB stock. Some investors won’t buy multifamily stocks while Lehman owns so much stock or will wait until Lehman sells, hoping for a lower price and a good deal. This, along with concerns over slowing revenue growth, an increase in new supply, and a recovery in the for-sale housing market, has caused multifamily stocks to underperform the major indexes for the past six months.
—Richard Campo, CEO, Camden Property Trust
The Archstone deal has been very interesting to follow. The impact for the broader multifamily market is significant. The initial transaction that split the portfolio is huge, and the follow-on transactions have really spurred the market. While the multifamily market has been robust, the caliber of equity players participating in the overall asset distribution signals the continued demand for apartment product. It is likely that there will be additional properties spun off from the various transactions over the next few years. It will create opportunities for our clients and partners.
—Rick Graf, president, Pinnacle
I view the Archstone transaction with mixed feelings. On the one hand, I am delighted for my good friends at Equity Residential and AvalonBay. David Neithercut and Tim Naughton have succeeded at a high level and acquired many excellent properties that will reward their shareholders for years to come. On the other hand, I regret the disbanding of the excellent Archstone team, Denver neighbors and friends to so many of us at Aimco. I have unbounded respect for Scot Sellers and Chaz Mueller, and I am eager to see what new triumphs lie ahead for them!
—Terry Considine, chairman and CEO, Aimco
First, you can look at this transaction and its impact on many fronts and from many different time frames. The most immediate impact associated with the transaction is the transparency it will create regarding high-quality asset values as Equity Residential and AvalonBay execute on their planned community sales. I think the multifamily industry benefits from this, as price discovery will likely lead to greater awareness as to the attractiveness of this asset class. Lastly, the impact of where a very talented team of Archstone associates ends up is less clear, but it’s likely that these individuals will be available to help any number of future employers.
—Tom Toomey, CEO, UDR
I believe the transaction was a positive event on multiple fronts. The pricing and financing achieved obviously supports the very positive outlook for the apartment business. Additionally, the transaction provides a meaningful opportunity for the public capital market’s growth in, and securitization of, apartment real estate. All of us in the apartment industry benefit over the long haul from increased awareness by the capital markets of the attractive investment returns that can be generated through disciplined investment and quality management of apartment real estate.
—Eric Bolton, chairman and CEO, MAA