AvalonBay: Hard To See Alpha At This Valuation

U.Ozel.Images/iStock via Getty ImagesDear readers, A couple days ago I downgraded a Sunbelt apartment REIT Mid-America Apartment Communities (MAA) to a HOLD, because of severe expected oversupply in the region which is already pressuring occupancy and rents. I argued against investing even at an elevated 7.2% implied cap rate, because I expected rents to drop sharply over the next two years. And while rents will eventually rebound as supply plummets post-2025 and the excess supply gets absorbed, this wo ...