ViO 234 Apartment Homes San Jose, CA F O U R T H Q U A R T E R 2 0 2 5 C R E D I T U P D A T E S E L E C T E D R A T I O S & C R E D I T R A T I N G S | Public Bond Covenants(1) | | | & Selected Credit Ratios | | | | | --- | --- | --- | --- | --- | --- | --- | | Q4 '25 | | Q3 '25 | Q2 '25 | Q1 '25 | Q4 '24 | Covenant | | Debt to Total Assets | 35% | 34% | 35% | 35% | 35% | < 65% | | Secured Debt to Total Assets | 4% | 4% | 4% | 5% | 5% | < 40% | | Interest Coverage | 510% | 517% | 524% | 532% | 540% | > 150 ...

Core Insights - Diamond Hill Capital's "Small Cap Strategy" reported a favorable performance in Q4 2025, with the Russell 2000 Index gaining 2.19% and a yearly gain of 12.81% despite geopolitical risks [1] - The Strategy outperformed the Russell 2000 Index with a return of 4.88% (net of fees) in the quarter [1] Company Focus - Centerspace (NYSE:CSR) was added to the portfolio during Q4 2025, identified as a REIT focused on apartment communities [2] - As of February 3, 2026, Centerspace's stock closed at $64.18, with a market capitalization of $1.138 billion [2] - Centerspace delivered a -4.18% return in the past month but has increased by 3.03% over the past twelve months [2] Investment Perspective - The company believes Centerspace is well-positioned for long-term growth due to its quality portfolio in differentiated markets and potential operational upside [3] - Centerspace is not among the 30 most popular stocks among hedge funds, with 14 hedge fund portfolios holding the stock at the end of Q3 2025, a slight decrease from 15 in the previous quarter [5] - While acknowledging Centerspace's potential, the company suggests that certain AI stocks may offer greater upside potential and lower downside risk [5]

Core Viewpoint - Centerspace (NYSE: CSR) will announce its operating results for the quarter and year ended December 31, 2025, on February 17, 2026, after market close, followed by a conference call on February 18, 2026, at 10:00 a.m. Eastern Time [1]. Company Overview - Centerspace is an owner and operator of apartment communities, focusing on providing quality homes with a commitment to integrity and service [2]. - Founded in 1970, the company currently owns 61 apartment communities comprising 12,262 homes across several states including Colorado, Minnesota, Montana, Nebraska, North Dakota, South Dakota, and Utah [2]. - In 2025, Centerspace was recognized as a top workplace for the sixth consecutive year by the Minnesota Star Tribune [2].

Core Viewpoint - Centerspace (NYSE: CSR) announced the tax treatment for 2025 distributions on its common shares, advising shareholders to consult personal tax advisors for specific tax implications [1]. Distribution Details - The cash distribution per share for common shares on various dates is as follows: - $0.750000 on January 13, 2025, with a record date of December 30, 2024 [2] - $0.770000 on April 8, 2025, with a record date of March 28, 2025 [2] - $0.770000 on July 10, 2025, with a record date of June 27, 2025 [2] - $0.770000 on October 10, 2025, with a record date of September 29, 2025 [2] - $0.191287 on January 12, 2026, with a record date of December 30, 2025 [2] - Total distributions for the year amount to $3.251287 per share, with $0.990004 classified as ordinary dividends [2]. Company Overview - Centerspace is an owner and operator of apartment communities, founded in 1970, currently managing 61 communities with 12,262 homes across several states including Colorado, Minnesota, and Utah [4]. - The company has been recognized as a top workplace for six consecutive years by the Minnesota Star Tribune [4].

Core Viewpoint - UDR, Inc. has successfully closed a $230 million expansion of its joint venture with LaSalle Investment Management, increasing the total size of the joint venture to approximately $850 million [1] Group 1: Joint Venture Expansion - The joint venture will now include four additional apartment communities, totaling 974 apartment homes [1] - The overall size of the venture will increase to a total of 2,560 apartment homes [1]

Core Insights - LaSalle Investment Management has closed a $230 million expansion of its joint venture with UDR, Inc., increasing the total size of the joint venture to approximately $850 million [1][4] Group 1: Joint Venture Expansion - The expansion adds four apartment communities totaling 974 homes to the joint venture's portfolio, which now comprises 2,564 homes [2] - The newly contributed properties are located in Portland, Orlando, and Richmond, with an average vintage of 1985, broadening the venture's geographic reach [2] Group 2: Management Statements - LaSalle's Global Portfolio Manager, Stuart Sziklas, expressed satisfaction with the collaboration and highlighted UDR's value through its high-quality operating platform and commitment to innovation [3] - UDR's Chairman, CEO, and President, Tom Toomey, noted that the new apartment communities enhance geographic diversification and provide current returns to LaSalle [4] Group 3: Company Background - LaSalle Investment Management manages $88.5 billion in assets globally as of Q2 2025, serving a diverse client base including pension funds, insurance companies, and private individuals [5] - UDR, Inc. owns or has an ownership position in 60,535 apartment homes, including 300 under development, and has a history of delivering long-term value to shareholders [7]

Core Points - Mid-America Apartment Communities, Inc. (MAA) announced a quarterly dividend payment of $1.53 per share, to be paid on January 30, 2026, to shareholders of record on January 15, 2026 [1] - The annualized dividend payment will increase to $6.12 per share, reflecting an 8.3% compounded growth over the past five years, marking the 16th consecutive year of dividend increases [1] Company Overview - MAA is a self-administered real estate investment trust (REIT) and a member of the S&P 500, primarily owning or having ownership interests in apartment communities across the Southeast, Southwest, and Mid-Atlantic regions of the U.S. [3] - The company focuses on delivering strong, full-cycle investment performance [3] Earnings Announcement - The board of directors declared the quarterly common dividend ahead of MAA's earnings announcement, which is expected on February 4, 2026 [2]

Group 1 - Aimco plans to sell its Brickell Assemblage in Miami for $520 million, targeting a closing date of December 2025 [3] - Aimco owns 15 fully stabilized multifamily communities with a total of 2,524 units and three recently completed Class A development projects with 933 apartment homes expected to stabilize by early 2026 [4] - Aimco is liquidating its holdings, having gone under contract to sell a seven-property portfolio in Chicago for $455 million, with a closing scheduled for the first quarter of 2026 [8] Group 2 - The Chicago portfolio acquisition involves LaTerra Capital Management and Respark Residential, combining their expertise in development, acquisition, and asset management [5] - The properties in the Chicago portfolio are located in key suburban submarkets and include a mix of high-rise, mid-rise, garden-style, and townhome communities [6] - The acquisition was financed with assumable below-market Fannie Mae debt, allowing for positive leverage, and plans include targeted unit renovations and active asset management initiatives [7]

Core Insights - AvalonBay Communities, Inc. (AVB) is valued at $25.2 billion and is one of the largest U.S. residential real estate investment trusts (REITs), focusing on high-quality apartment communities [1] - The company operates over 97,000 apartment homes in major metropolitan markets, aiming for stable long-term returns through established properties and new developments [2] Financial Performance - AVB stock has decreased 23.2% from its 52-week high of $231.21, with an 8.7% decline over the past three months, underperforming the Real Estate Select Sector SPDR Fund (XLRE) [3][4] - Year-to-date, AVB shares are down 19.3%, and 21.6% over the past 52 weeks, also underperforming XLRE [4] - Following the Q3 earnings report, AVB stock fell 4.3%, with core FFO per share at $2.75, which was 2.1% below analyst estimates [5] Revenue and Growth - Same-store residential revenue increased by 2.3% year-over-year to $685.4 million, while same-store residential NOI rose 1.1% to $461 million [5] - Despite recent performance issues, analysts maintain a "Moderate Buy" rating for AVB, with a mean price target of $204.03, indicating a potential upside of 14.9% [6]

Real Estate Market Outlook - The real estate industry is expected to experience a significant uptick in 2026, with home sales projected to increase by 14% following a lackluster performance in 2025 [1] - New home sales are estimated to rise by 5% in 2026, indicating a recovery in the housing market [1] - Home prices are anticipated to increase by 4% in 2026, driven by improved employment statistics and persistent supply shortages [2] Residential Real Estate Insights - The current housing market shows healthy gains in the $750K to $1 million price range, while the supply of affordable properties remains limited [2] - Strong mortgage applications and new home constructions, along with stable employment, contribute positively to the residential housing market outlook for 2026 [2] Commercial Real Estate Insights - Deloitte's report indicates a cautious optimism in the commercial real estate sector amid global economic volatility and high interest rates [3] - 83% of commercial real estate survey participants expect revenue growth by the end of the year, a decrease from 88% the previous year [4] - There is a modest increase in debt financing availability, but concerns remain regarding capital risks and policy shifts [3][4] Investment Strategy - The selection of real estate dividend stocks is based on strong hedge fund interest and healthy financial performance, which positions these firms to withstand market fluctuations [6] - The strategy of imitating top hedge fund stock picks has historically outperformed the market, with a reported return of 427.7% since May 2014 [7] Company Highlights - AvalonBay Communities, Inc. (NYSE:AVB) has a dividend yield of 3.85% and is viewed positively by analysts, with a target price of $216 [8] - SBA Communications Corporation (NASDAQ:SBAC) has a dividend yield of 2.28% and has made significant acquisitions, including 447 communication sites for $142.8 million [11][12] - SBAC's financial health includes $12.8 billion in total debt and a $1.5 billion buyback initiative, demonstrating strong liquidity management [12][13]