Cove Investments Blog

A Broad Brush is Useless

It’s natural for investors to ask how apartments have held-up during the pandemic. In normal times it’s hard to provide a useful answer given the idiosyncrasies of local markets. But over the past year, factors such as where the property is located (gateway coastal city vs. smaller sunbelt market), the level of rent charged, and the type of building (high rise vs. garden vs. townhome) have mattered significantly. A recent article by RealPage describes the wide range of outcomes across different neighborhoods within the same markets over the past year. For example, some markets within the Washington, DC metro area

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Rents on the Rise

The latest Yardi Matrix National Multifamily Report paints a picture of a broadening recovery in apartment rents. In the report, you’ll find several of Cove’s favorite markets showing some of the most robust rent trends nationally, including Houston, Atlanta, Austin, Tucson, and the NC Triad. You don’t have to take Yardi’s word for it. The latest Apartment List National Rent Report showed a 1.1% annual increase for March, the largest increase since they began publishing their national rent index in 2017. With the latest improvement, year-over-year rent growth at the national level has now turned positive, eliminating the pandemic. Even

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Explaining Exceptional Returns for Apartments

There’s an old story about an economist who sees a $20 bill lying on the street but won’t pick it up. Relying on his academic training he explains that the market is efficient and if there really were a $20 bill in the street, someone else would have already snatched it. Well… having spent nearly 30 years investing in stocks, you can guess that I don’t believe in the strong form of the Efficient Market Hypothesis. I believe that exceptional opportunities exist both in the stock market and in real estate, but it’s important to consider why that might be

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Can’t Sell What You Don’t Have

I was struck by this statistic highlighted in the Wall Street Journal’s Commercial Real Estate Weekly email. Putting aside my petty satisfaction in spotting a typo in the Journal’s infographic, the imbalance here struck me as fascinating. The implication here is that roughly 1/3 of all residential brokers have no listings. And if we assume that the 80/20 rule probably applies, then a smaller number of brokers have the bulk of the listings, so it’s even worse than it appears. Or is it? After a bit of thought and some digging around, the eye-catching stat probably doesn’t mean much as

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