THE CORRELATION BETWEEN MARKET FUNDAMENTALS
AND APARTMENT REIT PERFORMANCE
by
Andrew A. Friestedt
B.S., Construction Management, 1996
Arizona State University
and
Brian J. Tusa
B.S., Accounting, 1994
Boston College
Submitted to the Department of Urban Studies and Planning in Partial Fulfillment of the
Requirements for the Degree of Master of Science in Real Estate Development
at the
Massachusetts Institute of Technology
September 2001
©Andrew A. Friestedt and Brian J. Tusa
All rights reserved
The authors hereby grant to MIT permission to reproduce and to distribute publicly this
paper and electronic copies of this thesis document in whole or in part.
Author:
.. Department of Urban Studies and Planning
August 3, 2001
Author:
Department of frbin Studies and Planning
August 3, 2001
Certified By:
William C. Wheaton
Professor of Economics
Thesis Supervisor
Accepted by:
William C. Wheaton
Chairman, Interdepartmental Degree Program in Real Estate Development
THE CORRELATION BETWEEN MARKET FUNDAMENTALS
AND APARTMENT REIT PERFORMANCE,
by
Andrew A. Friestedt
and
Brian J. Tusa
Submitted to the Department of Urban Studies and Planning
on August 3, 2001 in partial fulfillment of the requirements for
the Degree of Master of Science in Real Estate Development
ABSTRACT
This paper empirically examines the correlation between apartment REIT performance (as
measured by Funds from Operations, Net Operating Income, Gross Rental Revenue, Net Income,
Market Capitalization and CAP Rate) and market fundamentals (as measured by weighted
average rent growth, weighted average employment growth, weighted average stock growth and
weighted average excess demand). The objective of this paper is to explain the variance in
historical apartment REIT performance based on historical market fundamentals.
Market fundamentals are broadly defined as the employment growth, population growth, stock
growth and rent growth. More detailed definitions of market fundamentals are provided within
the paper. Independent variables are developed from market data collected from 57 MSAs.
Using these data, weighted averages are generated in order to isolate geographical effects. These
independent variables are regressed against measures of financial performance of apartment
REITs as of December 31, 2000.
The results show that weighted average rent growth (given NREI rent data) and growth in
apartment units explain 37.1% of the variance in the percent change in FFO per unit and 37.8% of
the variance in the percent change in market capitalization per unit across the sample of selected
apartment REITs. Furthermore, weighted average rent growth (given government rent data) does
a relatively poor job of explaining the variance in the percent change in FFO per unit.
Thesis Supervisor: William C. Wheaton
Title: Chairman, Interdepartmental Degree Program in Real Estate Development
Acknowledgements
We would like to thank our wives for providing endless support and understanding
throughout the project in the past school year. Their help made the difficult times seem
bearable. We would also like to thank our classmates for their availability to answer our
numerous questions.
We would also like to thank Professor Wheaton for his assistance in data collection as
well as providing leadership and guidance for the research.
The Correlation Between Market Fundamentals and Apartment REIT Performance
3
Table of Contents
1. INTRODUCTION ......................................................................................................... 06
1.1.
Context of Research ...................................................................................... 06
1.2.
Supply and Demand Issues Affecting Market Fundamentals ........................ 10
1.3.
Research Issue ............................................................................................... 11
2. RESEARCH METHODOLOGY ........................................................................................
13
14
2.1.
Literature Review..........................................................................................
2.2.
Empirical Data Sources ................................................................................. 29
2.3.
Inform ational Interviews ............................................................................... 31
3. STATISTICAL RESEARCH .
........................................................................................... 33
3.1.
M arket Fundamentals .................................................................................... 33
3.2.
REIT Financial Performance ......................................................................... 37
4. STATISTICAL EXAMINATION OF CORRELATION ..........................................................
42
4.1.
Statistical Sample - REITs ............................................................................ 42
4.2.
Statistical Sample - M arkets ......................................................................... 44
4.3.
Descriptive Statistics - Dependent Variables ................................................ 49
4.4.
Descriptive Statistics - Independent Variables .............................................. 50
5. REGRESSIONRESULTS ................................................................................................
5.1.
52
Additional Research ...................................................................................... 60
6. CONCLUSIONS.
........................................................................................................... 62
7. BIBLIOGRAPHY.
.......................................................................................................... 64
The Correlation Between Market Fundamentals and Apartment REIT Performance
4
Table of Exhibits
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
1:
2:
3:
4:
5:
6:
7:
8:
9:
10:
11:
State Distribution of Apartments .................................................................
No. of Units on Property .............................................................................
Apartment Ownership .................................................................................
Apartment REIT Sample .............................................................................
MSAData Coverage ...................................................................................
06
07
08
44
45
Statistical Summary - Dependent Variables ................................................ 49
Statistical Summary - Independent Variables ............................................
WARG, WAEG, WASG Panel Data Regression Results ............................
Panel Data Regression Results (excluding apartments growth) ..................
Panel Data Regression Results ....................................................................
Cross Sectional Data Regression Results ....................................................
51
52
54
55
56
Table of Appendices
Appendix
Appendix
Appendix
Appendix
Appendix
Appendix
Appendix
Appendix
Appendix
Appendix
Appendix
Appendix
Appendix
Appendix
Appendix
Appendix
Appendix
1:
2:
3:
4:
5:
6:
7:
8:
9:
10:
11:
12:
13:
14:
15:
16:
17:
67
77
78
79
80
81
Geographic Concentration- 2000 ...........................................................
85
Geographic Concentration- 1999 ...........................................................
89
Geographic Concentration - 1998 ...........................................................
93
Geographic Concentration- 1997 ...........................................................
97
Geographic Concentration - 1996 ...........................................................
WARG Panel Data Results ...................................................................... 101
Panel Data Results (excluding apartment growth) ................................... 103
Panel Data Results (including apartment growth) .................................... 116
Cross Sectional Data Results ................................................................... 134
Percent of Portfolio in M SA with Rent Data ........................................... 144
10-REIT Index ......................................................................................... 145
10-REIT Data Results ............................................................................. 146
M arket Data .............................................................................................
Apartments, Rental Revenue, NOI, FFO and NI .....................................
M arket Cap ..............................................................................................
W eighted Averages .................................................................................
Cross-Sectional W eighted Averages ........................................................
The Correlation Between Market Fundamentals and Apartment REIT Performance
5
1.0 Introduction
1.1 Context of Research
As of March 2000, there were approximately 17 million apartments in the US.' Of
these, approximately 54% are located in major metropolitan cities and another 40%
are located within the suburban ring of these metropolitan markets. 2 Additionally,
construction started on 331,600 apartment units in 1999, and another $24.1 billion
worth of apartment building permits were issued. 3 Below is a distribution breakdown
by state.
Exhibit
State
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Dist. of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
State Distribution of Apartments
# of Apts. Rank
# of Apts. Rank State
49
29,725
178,616 26 Montana
30,609
349,676
84,421
2,437,646
306,010
188,261
39,092
107,852
1,146,079
453,548
93,071
34,077
808,124
286,892
130,681
118,836
168,371
171,738
48,736
358,454
416,025
485,375
313,112
88,021
48 Nebraska
15 Nevada
38 New Hampshire
1 New Jersey
18 New Mexico
25 New York
45 North Carolina
33 North Dakota
4 Ohio
10 Oklahoma
35 Oregon
47 Pennsylvania
5 Rhode Island
20 South Carolina
31 South Dakota
32 Tennessee
28 Texas
27 Utah
43 Vermont
14 Virginia
11 Washington
9 West Virginia
17 Wisconsin
37 Wyoming
98,503
189,801
63,719
486,500
66,862
1,943,860
348,516
49,836
620,066
149,228
205,068
531,758
57,175
158,402
37,883
274,060
1,460,445
92,343
20,208
415,990
403,049
48,573
298,640
15,538
34
24
40
8
39
2
16
42
6
30
23
7
41
29
46
21
3
36
50
12
13
44
19
51
'NMHC estimates based on U.S. Census Bureau data.
NMHC tabulations of data from the U.S. Census Bureau's Current Population Survey for March 2000
3 U. S. Bureau of the Census, Current Construction Survey 1999
2
The Correlation Between Market Fundamentals and Apartment REIT Performance
6
Missouri
Total U.S.
243,994
22
17,153,065
Source. NMHC estimatesbased on U.S. Census Bureau data.
Note: The apartmentstock estimates include both occupied and vacant units. For
these estimates, only units in structures with at least 5 or more units are counted.
Interestingly, the majority of apartments in the US are located in smaller structures,
not the large garden-style or high rise properties so commonly associated with
apartments.
Exhibit 2
# of Units on
Property
% of
Total
2 - 99 units
64%
100 - 199 units
14%
200 - 299 units
9%
300 - 399 units
5%
400 - 499 units
3%
500+ units
4%
Source: NMHC tabulation of unpublisheddatafrom the US. Census Bureau's 1995-1996
Property Owners andManagersSurvey.
Note: Statistics refer to privately owned housing and do not include the 13,493 public
housing projects or their 1,326,000 apartments (HUD estimatesfor 1995-1996).
One reason that the apartment unit per property breakdown favors small properties is
the current U.S. ownership structure. In the aggregate, individuals and partnerships
owned 67.2% of all apartment units.4 Smaller units per property are characteristic of
individual or small partnership ownership, whereas institutional ownership tends to
own larger properties.
4 NMHC tabulations of unpublished data from the U.S. Census Bureau's
1995-1996 Property Owners and Managers Survey.
The Correlation Between Market Fundamentals and Apartment REIT Performance
7
Exhibit 3
Apartment Ownership
Individuals
Partnerships
Real Estate Investment Trusts
Real Estate Corporations
Other Corporations
Non-Profits/Co-Ops
Other
Not Reported
TOTAL
2-4 unit
Pro
es
84.80%
3.90%
0.60%
1.00%
0.90%
0.60%
3.70%
4.50%
100.00%
5-49 unit
perties
57.40%
14.90%
1.10%
4.00%
4.00%
2.50%
4.60%
11.50%
100.00%
50+ unit
Properties
19.20%
32.70%
3.40%
9.60%
4.60%
6.00%
4.90%
19.60%
100.00%
Source. NMHC tabulationsof unpublisheddatafrom the U.S. Census Bureau's1995-1996Property
Owners andManagersSurvey.
As of 3rd quarter 2000, there were nineteen equity REITs whose portfolio is at least
90% comprised of apartments.5 This represents approximately 10% of the entire
REIT industry. These nineteen REITs comprise a market capitalization of
approximately $30 billion, or approximately 18% of the entire REIT industry market
capitalization. 6 These statistics speak to the importance and size of the apartment
sector in the REIT industry. Surprisingly, however, REITs only owned 2.1% of all
apartments in the United States as of December 31, 1999. 7 Yet many real estate
observers foresee a shift in the way real estate is owned, declaring that "the future of
commercial real estate is in securities, not direct ownership." 8 If REITs truly become
the preferred method of ownership in the US, then apartment REITs certainly have
significant market share yet to obtain.
5Constituent
6Ibid
Companies and Relative Weights in the NAREIT Real-Time Index for July 1, 2001
7NMHC tabulations of unpublished data from the U.S. Census Bureau's
1995-1996 Property Owners and Managers Survey.
8Richard Schoninger, Prudential Securities, as quoted by Maria Wood, "Cash-Rich for the Next Buying
Spree"
The Correlation Between Market Fundamentals and Apartment REIT Performance
8
With a growing trend in public ownership of real estate and apartments, coupled with
a huge market share still available to apartment REITs, a question then becomes, 'is it
possible to predict how apartment REITs will perform, given a certain geographic
concentration for their respective apartment portfolio?'
Prior academic research has touched on this topic, namely "The Determinants of
REIT Franchise Value" by Jim Young and a reprise of that paper by Rosanna SantosWuest. In these papers, regional economic growth opportunities were examined as a
determinant of franchise value, which is the premium/discount to NAV or the value
of the company in relation to its net asset value. These papers, however, included
both apartment and commercial REITs and focused more on the NAV aspect of
REITs.
The purpose of this paper is to examine the correlation between apartment REIT
financial performance (proxied by FFO, rental revenue, rental net operating income,
net income, market capitalization and CAP rate) and market fundamentals (proxied
by weighted average rent growth, weighted average employment growth, weighted
average stock growth and weighted average excess demand). Apartment REIT
performance is empirically analyzed in conjunction with market fundamentals using
regression analysis in an attempt to explain the variation in historical performance of
apartment REITs.
The Correlation Between Market Fundamentals and Apartment REIT Performance
9
1.2 Supply and Demand Issues Affecting Market Fundamentals
Some previous academic research has focused on supply-demand factors affecting the
investment demand for rental housing and accordingly, the apartment REIT industry.
Kenneth Rosen's paper (1996), "The Economics of the Apartment Market in the
1990s," succinctly explains how the market fundamentals discussed in Chapter 3.0
are affected by supply and demand issues, thus affecting fundamental and investment
demand for rental apartments. Rosen states that, "demand [for rental housing] will be
strong for areas with high in-migration, due to the young age characteristics of
movers, and the high costs of homeownership in many regions. Compounding this
effect is the continued growth in nontraditional households, which tend to be younger
and more likely to rent."9 The size, age distribution and growth rate by age group of
the population are critical factors in determining rental-housing demand. So too is the
increase in household formation relative to population, strong regional in-migration
due to job growth, and the increase in the relative affordability of rental housing on
the East and West coasts because of the sharp rise in prices of single family homes. ' 0
New household formation is being greatly affected by divorce, couples delaying
marriage, surviving elderly spouses' desire to remain in their own living quarters and
very young people living with the opposite sex. Rosen writes that "these dramatic
socioeconomic changes affecting all age groups [and increase in non-traditional
households] have led to a substantial increase in the demand for rental housing units
9 Rosen, "The Economics of the Apartment Market in the 1990's" [1996]
o Ibid
The Correlation Between Market Fundamentals and Apartment REIT Performance
10
because individual and nontraditional households are more than twice as likely as
family households to occupy rental housing units."'I
Rosen's paper illustrates the increase in the demand side for apartments, highlighting
apartments' increased importance in the coming years. The supply side should follow
suit as long as vacancies remain moderate and the capital supply for apartments
remains in-check. The combination of the increasing demand for apartments and
increased demand for public ownership for REITs helps to set forth the importance of
apartments in the U.S.
1.3 Research Issue
Market research firms, such as Torto Wheaton Research, have demonstrated an
ability to predict MSA rent growth, employment growth and stock growth with
reasonable accuracy. Also predictable, based on US Census Data, is age distribution
and group size. Since it is possible to predict market fundamentals with reasonable
accuracy, is it then possible to explain how apartment REITs perform based on
geographic portfolio concentration? In order to make this jump, three hypotheses are
set forth and tested empirically and/or through the academic research of others. They
are:
1. weighted average employment growth and weighted average stock growth
effectively measure demand and supply growth, which should be a proxy for
weighted average rent growth;
" Ibid
The Correlation Between Market Fundamentals and Apartment REIT Performance
11
2. weighted average rent growth should determine net income and FFO / NOI
growth; and
3. FFO growth should determine a REIT's market capitalization growth.
The purpose of this paper is to explore these three hypotheses and determine if such a
correlation exists between market fundamentals and apartment REIT performance.
This correlation will be tested empirically through market data collected for
numerous MSAs and apartment REIT performance data collected on 19 REITs.
The following Chapter describes the research methodology and literature used to
review the correlation between apartment REIT performance and market
fundamentals. Chapter Three provides a more detailed account of the research
methodology and defines the dependent and independent variables. Chapter Four
describes the statistical sample pool used to empirically test the research findings, and
Chapter Five summarizes the results of the empirical tests. Conclusions are presented
in Chapter Six.
The Correlation Between Market Fundamentals and Apartment REIT Performance
12
2.0 Research Methodology
This study defines the different measures of apartment REIT financial performance
and market fundamentals and quantifies a relationship between the two through
empirical analysis. Numerous explanatory (independent) variables were utilized to
empirically examine and statistically explain an apartment REIT's performance using
regression analysis. Regression analysis measures the relationship between one
economic variable, the "dependent variable" and one or more explanatory variables,
the "independent variables".
The investigation into the determinants of apartment REIT performance began as a
theory proposed by Professor William Wheaton of the MIT Center for Real Estate
and Economics Department. The research was initiated by a review of academic and
industry literature in real estate and finance to establish how a REIT's financial
performance is measured, as well as the appropriate components of market
fundamentals. This work was complemented by informational interviews with
academic practitioners to establish a scope of components for the regression analysis,
particularly with respect to market fundamental data. Through the literature reviews
and informational interviews, the appropriate dependent and independent variables
were established in order to complete the regression analysis.
It is important to note that this paper's research is limited to REITs focusing solely on
apartments and excludes manufactured home REITs. Apartment REITs were selected
because:
The Correlation Between Market Fundamentals and Apartment REIT Performance
13
1. The U.S government publishes reliable market data on MSAs
2. Apartment properties should better reflect market fundamentals due to the
apartment lease structure. When compared to office or industrial leases, the
apartment lease is generally shorter term (6 - 18 months) versus an office lease,
which can be as long as 20 years (or even longer). Therefore, the office data is
smoothed over a longer period and doesn't move as quickly as apartment data.
The shorter-term nature of the apartment lease can more accurately reflect the
current market conditions when compared to the longer-term office leases signed
many years ago. Apartments essentially can re-price immediately. Additionally,
office or industrial leases are affected by tenant quality, amount of space leased,
concessions, and/or tenant improvements. Thus in some instances, it can be
difficult to determine the effective lease rate, which can skew the market data.
2.1 Literature Review
A review of literature pertaining to apartment housing, apartment REITs and the
REIT industry as a whole, yielded useful information, but also revealed very little
research to date on the correlation of market fundamentals and apartment REIT
performance. Over the last several years, considerably more has been written about
the REIT industry. The National Association of Real Estate Investment Trusts
(NAREIT), an industry group, as well as publications from independent research
firms specializing in the REIT sector, such as Green Street Advisors and The
Penobscot Group, sponsored much of this research. These publications provided the
most useful insight into REIT performance measures. Academic research and
The Correlation Between Market Fundamentals and Apartment REIT Performance
14
research sponsored by the National Multi Housing Council (NMHC) provided the
greatest information regarding the apartment industry, particularly economic
information utilized in generating market fundamental data. The NMHC and
NAREIT websites, which provided "one-stop shopping" for apartment and REIT
literature, were a tremendous resource for providing information. A large volume of
writing is in non-academic publications covering current topical issues, particularly
supply and demand issues that may affect the apartment industry, and therefore
apartment REITs, as well as issues concerning REIT performance.
Publicationsfrom Trade Organizations
The NMHC and NAREIT organizations have published several papers relevant to
the apartment industry or apartment REIT industry. Among the papers reviewed,
one of the more notable is NMHC's "Performance Across Local Markets" by Jack
Goodman, which discusses the geographic correlation across local apartment
markets. Specifically, the paper seeks to aid investors in maximizing the
geographic diversification of an apartment portfolio, utilizing rent increases and
vacancy rates among the measures. Two key results in this paper were: 1) some
apartment markets are easier to forecast than others and 2) growing apartment
markets are not always profitable markets. 12 Goodman's research concludes that
rent predictability in some apartment markets is possible while in others it is very
difficult. The reason is that annual percentage increases in rents over the last ten
years is highly correlated in some markets with annual job growth, multi-family
12
Goodman, "Performance Across Local Apartment Markets", [1999].
The Correlation Between Market Fundamentals and Apartment REIT Performance
15
construction and vacancy rates, while in others there is no correlation at all.
Based on this study, there is no obvious pattern. 13
Goodman's research is important because this thesis attempts to explain
apartment REIT performance, which is predicated upon the ability to predict
market fundamentals, such as rent growth, job growth and stock growth, by
establishing a correlation between performance and fundamentals.
NAREIT has published several reports that were useful in gathering information
on REIT return measures as well as understanding the industry's position on
Funds from Operation (FFO), a topic of much discussion. According to
NAREIT's "Investing in Real Estate Investment Trusts", there are many factors
affecting REIT returns, such as real estate fundamentals, earnings and dividends,
and company fundamentals. An important conclusion of this research is that
although real estate fundamentals may affect the commercial real estate business
as a whole, understanding a REIT's geographic concentration may impact a
certain stock's price more than others, because the economy is not equally strong
in all geographic regions, and economic demand may not increase the demand for
all property types at the same time.' 4 This is important in this thesis as it supports
the use of geographic concentration weights in the empirical analysis discussed in
Chapter Five. By appropriately weighting the geographic concentration of a
13
Ibid
14 Ibid
The Correlation Between Market Fundamentals and Apartment REIT Performance
16
REIT's portfolio, it is possible to compare different apartment REITs based on the
relative strength or weakness of the real estate markets that exists in that portfolio.
The NAREIT "White Papers on FFO" were informative in defining and
calculating FFO (discussed in greater detail in chapter 3.2). Moreover, the
publication helped explain the history and intended purpose of the financial
measure. Since FFO has been the subject of much debate among industry
observers, this publication set out to clarify the industry's position. That is, FFO
is intended to be a supplemental financial measure of a REIT's performance
which specifically addresses the issue that historical cost accounting, in particular
depreciation, can be misleading, as historical real estate values have risen and
fallen with market conditions.' 5 Therefore, FFO excludes historical cost
depreciation in its calculation. Understanding FFO is important since it is one of
the dependent variables used in this paper's empirical analysis.
Publicationsfrom Independent Research Firms
Widely regarded as one of the key financial measures of a REIT, FFO was
initially considered the most important dependent variable in the regression
analysis. Green Street Advisors, however, has issued research reports that
indicate net income may be just as important as FFO. Green Street's "The High
Cost of Owning Real Estate" states that FFO dramatically overstates performance
for most REITs while net income dramatically understates performance for most
REITs. Although it is unclear which measure comes closer to the actual
The Correlation Between Market Fundamentals and Apartment REIT Performance
17
economic truth, Green Street feels that net income is a conceptually superior
performance measure because real estate does indeed depreciate (contrary to what
FFO calculates) and net income properly matches revenues with expenses (which
FFO does not do). 16
A change in analyst sentiment also changed the initial importance given to FFO.
Three major Wall Street firms, Merrill Lynch, Morgan Stanley and Citigroup's
Salomon Smith Barney, recently announced that REIT analysts would add an
additional forecast for financial results using net income per share. 17 The reason
for the change is that FFO does not conform to Generally Accepted Accounting
Principles (see definition of FFO above). Many analysts feel that FFO represents
a pro forma number. "As with other pro formas, the issue with FFO is there is no
common definition, and people pick and choose the numbers that they use to
calculate FFO.'
8
A major advantage to using net income per share is that gains
and losses on asset sales, a large part of REITs' earnings, are included in the
calculation, which is contrary to the FFO calculation.
As a result of Wall Street's increased emphasis on net income as well as
independent research reports such as Green Street's support of net income, a net
income dependent variable was added for the empirical analysis.
15 NAREIT "White Paper on Funds from Operations", [1999]
16 Green Street Advisors, "The High Cost of Owning Real Estate", [1999].
17 Starkman, Weil, "Three Firms to Emphasize Different Metric for REITs", [2001].
18 Green Street Advisors, "The High Cost of Owning Real Estate", [1999].
The Correlation Between Market Fundamentals and Apartment REIT Performance
18
Academic Research
Much of the REIT academic research to date has focused on the relationships
between publicly traded equity REITs and the larger stock market forces for
publicly traded equities. Han and Liang (1995) studied the historical performance
of REITs by determining: 1) whether REITs performed differently from the
market portfolio, on a risk-adjusted basis, over the period 1970 - 1993; 2)
whether REIT performance varies significantly over time; and 3) whether the
outcomes of REIT performance studies are sensitive to the choice of performance
benchmarks and REIT samples. Han and Liang concluded that over the 1970 1993 period, REIT performance was similar to that of a passively managed
portfolio of three-month treasury bills and stock market portfolio. Also, REIT
performance was not stable over the sample period, concluding that studies that
focus on short time periods may lead to varying conclusions. Most importantly
though, they found that the use of the S&P 500 index lead to results that
overstated the performance of the REIT industry portfolios, relative to the stock
market portfolio. 9
More recent research on the same topic has yielded similar results. Ziering, Liang
and McIntosh (1995) note that "the total return correlation between REITs and the
S&P 500 Index, as well as other standard stock market indexes, spiked
dramatically during the second half of 1998, reversing a trend toward decreasing
19 Han and Liang, "The Historical Performance of Real Estate Investment Trusts", [1995].
The Correlation Between Market Fundamentals and Apartment REIT Performance
19
correlation over the past three years."20 Ziering, Liang and McIntosh believe
though that this trend is temporary and that there will be a continuation of the
gradual disconnect between the performance of the REIT sector and other capital
market indexes. 2 '
Sanders (1997) found that equity REIT returns have a high correlation to the
Wilshire Small Value index and the high-yield corporate bond index. Sanders,
however, notes that there is still a considerable amount of unexplained variation
in REIT returns that cannot be diversified away with major stock and bond
indexes, particularly since
1991.22
Hartzell and Mengden (1986) concluded that equity REIT prices track the stock
market, mirroring the volatility, but have income characteristics that resemble
unsecuritized real estate. 23 Similarly, Giliberto found that equity REITs
correlation with the stock market has declined over time and correlation with
bond returns has increased. 24 Intuitively, this makes sense since many investors
view the cash flow stream of leases similar to the cash flow stream of bonds.
20 Ziering,
Liang, and McIntosh, "REIT Correlations with Capital Market Indexes: Separating Signal From
Noise", [1999].
21 Ibid.
22 Anthony B. Sanders, "The Historical Behavior of REIT Returns", in Real Estate Investment Trusts,
Garrigan and Parsons, [1997].
23 Hartzell and Mengden, "Equity Real Estate Investment Trusts - Are They Stocks or Real Estate?",
Solomon Brothers, Inc., [1986].
24 S. Michael Giliberto, "Equity Real Estate Investment Trusts and Portfolio Diversification", Salomon
Brothers, Inc., [1989].
The Correlation Between Market Fundamentals and Apartment REIT Performance
20
Chen and Peiser examine the risk and return characteristics of REITs and their
effects on returns. Specifically, they examined (1) the performance of"new"
versus "old" REITs, (2) the risk-return trade-off of different REIT sectors, and (3)
how certain characteristics of REITs such as size and portfolio diversity affect
performance. Their research indicated that REITs are more highly correlated to
the S&P Mid-Cap 400 index than with the S&P 500 index. This is not surprising
since REITs have smaller capitalizations than the large companies included in the
S&P 500 index. However, the correlation between REITs and the S&P Mid-Cap
400 index is still not very strong. 25
Their results also indicate that diversified REITs (multiple property types)
performed worse than non-diversified REITs, meaning the market did not value
diversification by property type as much as it valued more focused investment
strategies. Other results of their study indicate that small REITs ($20 - 100
million in market cap) had higher returns than the large REITs, but also had a
higher standard deviation. Geographically concentrated REITs (investments in
only one state) showed significantly higher returns but also significantly higher
standard deviations than geographically diversified REITs (investments in four or
more states.)
Since investors often perceive investment in equity REITs as comparable to direct
investing in unsecuritized real estate, academic research has attempted to explain
the correlation between equity REIT returns and unsecuritized real estate returns.
25
Chen and Peiser, "The Risk and Return Characteristics of REITs - 1943 - 1997", [1999].
The Correlation Between Market Fundamentals and Apartment REIT Performance
21
The basic premise to these studies is that equity REIT returns share some
unspecified factor or factors that also affect more traditional unsecuritized real
estate. However, the correlation between indexes of equity REITs and real estate
returns is conflicting, which casts doubt on this assumption. Giliberto's research
(1990) concludes, "the correlation between indexes of equity REITs and real
26
estate returns is zero.".,26
Follow-up research by Giliberto finds that the residuals from regressions of both
real estate series on financial asset returns are significantly correlated. After
removing financial asset market influences, the co-movement between equity
REIT returns and the NCREIF Property Index is significant. Giliberto states that
there is a common factor (or factors) associated with real estate that affects both
sets of returns. This may be the pure real estate market fundamentals that are not
shared with financial asset markets but that influence both equity REITs and the
NCREIF Index (private, institutional real estate returns). Additionally, lagged
values of the equity REIT residuals help explain variation in the conventional
unsecuritized real estate return residuals. Giliberto concludes that investors do
capture some portion of real estate market returns by investing in REITs, although
they must accept volatility that approaches that of stocks. 27
Lieblich, Pagliari and Webb (1997) conducted similar research to Giliberto's.
Their research was motivated by the theory that long-run behavior of REITs
26
S. Michael Giliberto, "Equity Real Estate Investment Trusts & Real Estate Returns", [1990]
27 Ibid
The Correlation Between Market Fundamentals and Apartment REIT Performance
22
should generally follow the behavior of the underlying real estate assets.
Accordingly, the NAREIT Index (historical public REIT returns) is compared to
the NCREIF Index. Unlike previous research, Lieblich, Pagliari and Webb
focused on dividends, investment values and dividend yields to compare the
indexes. 28 As with previous research, a weak statistical relationship between total
returns for securitized and unsecuritized real estate was found. In the short-term,
dividends, investment value and changes in dividend yields between secured and
unsecured real estate were statistically weak even when lags of up to two years
were examined. They concluded that the long-term path of prices for securitized
and unsecuritized real estate exhibited the strongest relationship and that the weak
relationship for explaining total returns may be more attributable to the volatility
,.~~~~~~~~2
of dividends and/or changes in dividend yields.2 9
Nelling and Gyourko (1998) examined the predictability of monthly returns on
equity REITs over the period 1975-1995 and compared them with small and midcap firms. Using a time series approach, their study indicated statistically
significant evidence of predictability of monthly returns. The average monthly
return, however, was insufficient to cover transactions costs necessary to exploit
the prediction. 30
Lieblich, Pagliari and Webb, "Historical Behavior of REIT Returns: A Real Estate Perspective", in Real
Estate
Investment Trusts, Garrigan & Parsons, [19971.
29
28
Ibid.
30
Nelling and Gyourko, "The Predictability of Equity REIT Returns", [1998].
The Correlation Between Market Fundamentals and Apartment REIT Performance
23
Myer and Webb (1994) examined the return properties of equity REITs, common
stocks and unsecuritized commercial real estate with the retail industry used as the
common thread. Again, one of the goals of their research was to explore the longterm relationship between securitized and unsecuritized real estate. The results of
Myer and Webb's research found evidence that a positive contemporaneous
relationship exists between common stocks and equity REITs. Thus a common
factor (or factors) affects the returns of common stocks and equity REITs that are
unrelated to the general stock market. Their results, however, were inconclusive
in drawing a correlation between commercial unsecuritized real estate and either
equity REITs or common stocks.31
Chan, et al (1990), using a multifactor arbitrage pricing model for the period 1973
- 1987, found that four factors (unexpected inflation, changes in the risk and term
structure of interest rates, and the percentage change in the discount on closed end stock funds) consistently drive equity REIT returns. The impact of these
variables is approximately 60 percent of that for common stocks.3 2
Liu and Mei (1992) examined the predictability of equity REIT returns and their
co-movement with other assets. They found that expected excess returns are
more predictable for equity REITs than for bonds and small-cap and value-
31 Myer
32
and Webb, "Retail Stocks, Retail REITs and Retail Real Estate", [1994].
Chan, Hendershot and Sanders, "Risk and Return on Real Estate: Evidence from Equity REITs", [19921.
The Correlation Between Market Fundamentals and Apartment REIT Performance
24
weighted stocks. They also found that equity returns move more closely with
small-cap stocks than with large-cap stocks.3 3
Similar to previous research, Goldstein and Nelling (1999) examined the
diversification potential of REITs by comparing their return behavior over the
period 1972 - 1998 to the returns on common stocks, small stocks, treasury bills,
long-term government bonds, corporate bonds and the inflation rate. The major
difference in Goldstein and Nelling's work is that the behavior of REIT returns
are investigated in advancing and declining stock markets separately to examine
the claim that REITs provide a good hedge against general stock market declines.
Additionally, both equity and mortgage REITs are studied. The results of the
study indicated that REITs "do not have symmetric hedging properties." In
particular, both equity and mortgage REITs are more highly correlated with
stocks when the market is declining than when it is advancing. 34
Clayton and MacKinnon's (2001) research is very similar to Goldstein and
Nelling in that Clayton and MacKinnon also study the links between REITs and
financial asset returns. However, Clayton and MacKinnon include unsecuritized
real estate returns as one of the factors in order to evaluate the claim that REITs
are more highly linked with direct property markets. Accordingly, Clayton and
MacKinnon examine the correlation between NAREIT and an "unsmoothed" or
"de-lagged" NCREIF index. The NCREIF index is subject to a number of
33 Liu, Hartzell, Grissom, Greig and Mei, "The Predictability of Returns on Equity REITs and Their Comovement with Other Assets", [1992].
The Correlation Between Market Fundamentals and Apartment REIT Performance
25
limitations, most notably NCREIF returns lag true market returns as a result of
appraisal smoothing at the individual property level and the inclusion of outdated
information. Clayton and McKinnon counteract these limitations by employing
the Transaction Value Index (TVI) created by Fisher and Geltner (2000). The
TVI aims to undo the lag-induced distortions in the NCREIF index and produce a
more realistic index of property returns. The results of Clayton's and
MacKinnon's work are consistent with previous studies in that REIT market
returns are highly correlated with small cap stocks and uncorrelated with direct
real estate returns over the 1978-1998 time period. However, since 1992, the
equity NAREIT returns were positively correlated and statistically significant
with the de-lagged NCREIF index while the correlation between REITs and
stocks in general fell by a large amount. Clayton and MacKinnon conclude that
"with growth and maturation in the market, the performance of REITs has
become less like the performance of stocks and more like that of the underlying
real estate since the REIT boom of 1992 or 1993." 35
The work of Liang et al. (1996), which relates specifically to apartment REITs
and apartment real estate, is very applicable to this thesis. Their research
examines the possibility that equity apartment REITs provide a proxy for the
ownership of apartment sticks and bricks. For this purpose, a hedged apartment
REIT index was constructed by removing the return components of stocks in
general and non-apartment equity REITs from returns of equity REITs that invest
34
Goldstein and Nelling, "REIT Return Behavior In Advancing and Declining Stock Markets", [1999].
The Correlation Between Market Fundamentals and Apartment REIT Performance
26
in apartment real estate. The resulting "double-hedged" apartment REIT index
was found to satisfactorily track the performance of appraisal-based apartment
real estate. Also, the hedged apartment REIT index does not suffer from appraisal
smoothing or seasonality issues. Therefore, the hedged apartment REIT index
can be used as a proxy for apartment real estate. 36 They determined this was
significant in making portfolio diversification decisions.
A fair amount of research has been published on REIT pricing, most of which is
in the context of REIT performance relative to the stock market or indices. A
major impact on REIT pricing, the Revenue Reconciliation Act of 1993 paved the
way for greater institutional ownership of REITs. Prior to this law, REITs had to
abide by strict rules in order to qualify for the significant tax advantages that
REITs enjoy. One of the rules that REITs had to comply with was the "five or
fewer" rule. This rule disqualifies a REIT from advantageous tax status if more
than 50% of its shares are held by five or fewer shareholders. This rule restricts
the sources of income and retention of earnings, as well as limited institutional
investment interest in REITs. Since REITs traditionally have small market
capitalizations, institutional buyers found it difficult to accumulate a sufficient
position in an individual REIT without jeopardizing the REIT's tax status.
The 1993 Act modified the "five or fewer" rule, allowing each institutional
beneficiary, rather than the fund itself, to be considered an individual REIT
Clayton and MacKinnon, "The Time-Varying Nature of the Link between REIT, Real Estate and
Financial Asset Returns", [2000].
35
The Correlation Between Market Fundamentals and Apartment REIT Performance
27
shareholder. Therefore, institutional investors can now take sizable positions in
REITs without jeopardizing the REITs status. The result has been an increase in
institutional ownership of REIT securities. Chan, Leung and Wang (1998) found
institutional ownership in REITs ranged from 12% to 14% between 1986 and
1992. Institutional ownership increased to 17% in 1993, 26% in 1994 and 30% in
1995. 37
Crain, Cudd and Brown (2000) studied the increased REIT ownership by
institutional investors specifically as the increased ownership relates to
unsystematic risk. Their theory is that unsystematic (idiosyncratic) risk, which
can be removed through diversification, will become less important due to the
highly diversified nature of pension funds. 38 Since systematic risk can be
removed through diversification, it should become less important in the pricing of
equity REITs. They found strong empirical evidence that after enactment of the
1993 Act, the risk structure of equity REIT pricing changed significantly.
Unsystematic risk represents variations in equity REIT returns unexplained by
movement in the market index (S&P 500). Their study results indicate that since
the 1993 Act the role of unsystematic risk in explaining equity REIT returns
declined significantly over time, 39 the same corresponding time period as the
increase in institutional ownership.
Liang, Chatrath and McIntosh, "Apartment REITs and Apartment Real Estate", [1996].
Chan, Leung and Wang, "Institutional Investment in REITs: Evidence and Implications", [1998].
38 Crain, Cudd and Brown, "The Impact of Revenue Reconciliation Act of 1993 on the Pricing Structure of
Equity REITs", [2000].
36
37
The Correlation Between Market Fundamentals and Apartment REIT Performance
28
Fields, Rangan and Thiagarjan (1998) conducted research directly applicable to
FFO growth as it relates to market capitalization. Fields et al. compared net
income and FFO to help explain contemporaneous REIT pricing and annual stock
returns. Since previous research has indicated that price should be expressed as a
linear function of net income, book value and dividends, Fields et al. used end of
year book value of equity and dividends, in addition to net income and FFO, as
explanatory variables for stock prices. Using regression analysis, Fields et al.
found that net income has more explanatory power for stock returns than does
FFO. Moreover, net income explained 61% of the variation in price compared to
FFO, which explained approximately 57.8% of the variation in price. However,
the results were not statistically significant. They concluded that net income only
marginally explains equity REIT prices better than FF.
40
2.2 Empirical Data Sources
The U.S. Census Bureau was the primary source for market data, such as rent growth,
employment growth and stock growth (which was calculated from permit data).
These data are considered extremely reliable because they are comparable across
markets and comprehensive of the conditions within the market. The figures
comprise the entire rental stock, not just one structure type or quality grade. Housing
construction data, as measured by building permits by size of structure, are also
available from the Census Bureau. Since over 80% of all multi-family, construction
is built for rental occupancy, multi-family permits are a good indicator of additions to
39 Ibid.
The Correlation Between Market Fundamentals and Apartment REIT Performance
29
the apartment stock. 4 1 The estimates of rents, vacancies, and construction are
generated using large, scientifically drawn samples and therefore considered very
accurate. 4 2
The great extent to which publicly available rental housing data exists is both a
strength and a weakness. Metropolitan areas are comprised of various, diverse submarkets, and metro averages smooth through that diversity. Additionally, rental
housing includes not only large properties, but also single-family home rentals and
small multi-family properties. These smaller properties often perform differently
than larger, institutional properties, which can affect the data and essentially
"average" out the diversity. 43
Data was also obtained from National Real Estate Index ("NREI"), a provider of real
estate/economic research. NREI's publications analyze commercial real estate trends
and demographic changes in over 50 metropolitan markets throughout North
America. NREI's proprietary database also provides quarterly prices, rents and cap
rates for the office, industrial, retail, and apartment sectors at the metropolitan,
regional and national levels.
NREI's apartment rent data is gathered directly from apartment owners and managers
in 58 metropolitan markets, as well as appraisers, brokers and institutional advisors.
40
Fields, Rangan and Thiagarajan, "An Empirical Evaluation of the Usefulness of Non-GAAP Accounting
Measures in the Real Estate Investment Trust Industry", [1998].
41 Goodman, "Performance Across Local Apartment Markets", [1999].
42
Ibid.
The Correlation Between Market Fundamentals
and Apartment REIT Performance
I
30
The rents include both Class A and B-rated properties. NREI defines Class B
properties as those built or substantively renovated between 1980 and 1988.
Additionally, the prototypical apartments NREI tracks are typically garden-style or
campus-style, ranging from 100-300 units per property and maintaining a certain
standard of appearance and amenities appropriate for the geographic region.
Much of the REIT-specific data (geographic concentration, revenue, NOI, FFO, units
owned, interest expense, market share, etc.) were obtained from SNL DataSource, a
fee-based service provider that tracks and researches corporate information in
financial services, real estate and energy industries. Through an MIT subscription
agreement, the SNL DataSource Real Estate Securities Module provided detailed
geographic information on all owned-properties in which an applicable apartment
REIT has an equity interest as well as all pertinent financial data, such as rental
revenue, rental NOI, FFO, net income, market capitalization and CAP rate. SNL
obtains all REIT data from either SEC public documents or directly from a REIT's
published literature.
2.3 Informational Interviews
Having completed the initial literature review, interviews with academics were
conducted to better understand the optimal dependent and independent variables
required for the regression analysis. Moreover, these interviews helped to better
organize the databases for regression analyses, resulting in the most efficient method
for empirical analysis. Once initial regression analyses were produced, additional
43 Ibid.
The Correlation Between Market Fundamentals and Apartment REIT Performance
31
academic interviews yielded more independent variables, in hopes of generating
stronger results. These additional interviews were critical as they strengthened the
thesis core. Perhaps the main benefit of the academic interviews was the additional
data source suggestions, which facilitated the data collection efforts. Through these
data source suggestions, contacts at source providers were gained, providing access to
data that was otherwise thought to be unattainable within the time constraints of this
thesis.
The Correlation Between Market Fundamentals and Apartment REIT Performance
32
3.0 Discussion of Variables
3.1 Components of Market Fundamentals
From the literature review and academic interviews, the important components of
market fundamentals and REIT financial performance were determined for the
empirical analysis. The components of market fundamentals are:
1. Weighted average rent growth
2. Weighted average stock growth
3. Weighted average employment growth
4. Weighted average excess demand growth
5. Percent change in apartments
6. Percent of portfolio in MSA
A short explanation of each component follows:
Weighted Average Rent Growth (WARG)
Rental growth represents the annual percent change in rental units for U.S. markets.
Weighted average rent growth was calculated by multiplying each REIT's portfolio
concentration (number of units in each MSA divided by the total number of units in
the portfolio) by the percent change in rent growth for that MSA from the previous
year. Summing up the results for each REIT equals the weighted average rent
growth. WARG was calculated with two different sets of market rent data government and NREI data - in order to fill gaps where data were missing.
Government - Weighted Average Rent Growth
The Correlation Between Market Fundamentals and Apartment REIT Performance
33
Government - WARG was calculated by multiplying the REIT's portfolio
concentration by the percent change in rent for a given MSA (given government
rent data). If the government data lacked information on the MSA, NREI rent
data were used. If the NREI rent data lacked information on the MSA, the
national rent average was used. As previously discussed, the government data
includes all units rented in the U.S. regardless of size. It is obtained through U.S.
Census Bureau Survey.
NREI- WeightedAverage Rent Growth
NREI - WARG was calculated by multiplying the REIT's portfolio concentration
by the percent change in rent for a given MSA (given NREI rent data) If the
NREI data lacked information about the MSA, government rent data were used.
If the government data lacked information on the MSA, the national rent average
was used. Again, NREI data focuses on larger, institutionally owned class A and
B properties and obtains data directly from property owners, appraisers and
pension funds.
Weighted Average Stock Growth (WASG)
Stock growth represents the annual change in units available for rent. Weighted
average stock growth was calculated by first constructing the historical stock growth
for 57 MSAs (identified in Appendix 1) by taking the number of"renter-occupied
housing units" as reported by the U.S. Census Bureau in 1990 and adding permits
(1990 - 1999) to the respective MSA's stock number. For example, the number of
The Correlation Between Market Fundamentals and Apartment REIT Performance
34
renter-occupied housing units for a certain MSA in 1991 was calculated by adding the
number of renter-occupied housing units in 1990 to the number of multi-family
permits issued in 1990. This process was repeated through 2000. After calculating
the percent change in stock growth from year to year, that number was multiplied by
each REIT's portfolio concentration. Where stock growth was not available for an
MSA, the national stock growth minus the sum of the stock growth for the 57 MSAs
that had stock growth information was used. Summing up the product of stock
growth and portfolio concentration for each REIT produced the WASG.
Weighted Average Employment Growth (WAEG)
Employment growth measures the change in number ofjobs for a specific MSA.
Weighted average employment growth was calculated by multiplying the REIT's
portfolio concentration by the growth in employment for each MSA. Where
employment growth was missing for an MSA, the national employment growth minus
the sum of the 57 MSAs that had employment growth information was used.
Summing the product of employment and portfolio concentration for each REIT
produced the WAEG.
Weighted Average Excess Demand (WAED)
This variable measures the extent to which employment is growing faster or slower
than stock in each MSA where market data was available. Weighted average excess
demand was calculated by taking the difference between the weighted average
employment growth and weighted average stock growth.
The Correlation Between Market Fundamentals and Apartment REIT Performance
35
Percent Change in Apartments
As discussed in Chapter 3.2, the dependent variables were calculated using per unit
growth. Per unit values were used to compare REITs on an "apples to apples" basis.
One problem with the per unit calculations though is the accounting method
employed by REITs for newly acquired or disposed properties. For example,
properties that were acquired in the second half of the calendar year were included in
the per unit calculation if the units were still in the portfolio at year-end. However,
the operating results associated with newly acquired units were only for a short stub
period, therefore understating that REITs' data, particularly during a high acquisition
period.
To help smooth the volatility caused by this accounting issue, the independent
variable "Percent Change in Apartments" was added. This variable was added to all
regressions in order help offset the effects of the per unit data aberrations. The
percent change in apartments variable was calculated by taking the difference in the
number of apartments each REIT held in its portfolio between year 2 and year 1 and
dividing that result by the number of apartments in year 1. This was done for five
years, 1996 - 2000.
Percent of Portfolio in MSA
As indicated in Chapter 4.2, Exhibit 5, government and NREI rent data was obtained
for 57 MSAs for a five-year period. However, rent data were unavailable for markets
The Correlation Between Market Fundamentals and Apartment REIT Performance
36
outside the 57 MSAs in certain years. In those instances, national rent data were used
as a substitution. In order to offset the possible effects of too many national data
entries, the independent variable "Percent of Portfolio in MSA" was calculated. For
each apartment REIT portfolio in the pool (see Chapter 4.1 Exhibit 4) the total
number of apartments in the 57 MSAs (Exhibit 5) was calculated. This number was
then divided by the total number of apartments in the corresponding REIT's portfolio.
The result is the concentration of a REIT's portfolio in MSAs where rent data were
available.
An additional measure was undertaken to negate the possible influence of national
data. The ten REITs with the greatest concentration of units in MSAs for which we
had government data were calculated and used in a regression analysis to verify the
construction accuracy of the government data. This was used as a test to try and
eliminate the noise of REITs with high concentrations of units in MSAs where
government rent data did not exist.
3.2 Components of REIT Financial Performance
The measures of REIT financial performance are:
1. Percent change in rental revenue per unit
2. Percent change in rental net operating income per unit
3. Percent change in funds from operations per unit
4. Percent change in net income per unit
5. Percent change in market capitalization per unit
6. CAP rate
The Correlation Between Market Fundamentals and Apartment REIT Performance
37
Percentage Change in Rental Revenue per Unit
Rental revenue data was collected from SNL DataSource, which obtained the data
from company SEC filing documents. The percentage change was calculated year-toyear for a five-year period (1996 - 2000). Rental revenue is a significant financial
measure of apartment REITs because it represents the revenue generated solely by
real estate assets and excludes "other income" such as furniture rental, utility bill
backs, laundry, etc. By excluding all other non-real estate revenue, the real estate
revenue is isolated, providing a better analysis when compared to rent growth data.
In order to properly compare the REITs on an equal basis, percentage change in rental
revenue per unit was used as a component of REIT financial performance.
Comparing REIT performance on an absolute basis (i.e., not on a per unit basis) is
misleading and non-informative because the results of highly acquisitive REITs will
show abnormal absolute growth. Note that for all per unit calculations, unit
information was obtained from SNL DataSource and crosschecked against annual
reports. Immaterial differences existed in certain instances, which can be explained
by the criteria for determining actual units in a REIT's portfolio for a given year.
These criteria are defined as follows: in order for a unit to be considered part of a
REIT's portfolio, the REIT had to own the unit as of December 31 t of a given year.
This implies that units under construction as of December 3 1st were included while
assets sold anytime before December 3 t were excluded.
The Correlation Between Market Fundamentals and Apartment REIT Performance
38
Percentage Change in Rental Net Operating Income per Unit
Rental net operating income was also collected from SNL DataSource. The
percentage change was calculated in a similar method to rental revenue, over the
same five-year period. Rental net operating income ("Rental NOI") is defined as
rental revenue from real estate assets less all real estate-related expenses, including
tenant improvements, leasing commissions and revenues but excludes financing
costs. Rental NOI is the cash flow available to service the debt. This is a significant
financial measure because many real estate properties are valued by applying a
capitalization rate to the rental NOI to derive a property valuation. Additionally,
since the NOI reflects the cash flow available for financing which is property specific,
it can be a useful measure to compare properties, particularly on a per unit basis. As
was the case with rental revenue, it is necessary to compare the REITs on an "apples
to apples basis". Therefore, percentage change in NOI is calculated on a per unit
basis.
FFO per Unit
Funds from operations ("FFO") is perhaps one of the most widely used measures of
financial performance by industry analysts. FFO is net income (as measured by
Generally Accepted Accounting Principles), excluding gains or losses from sales of
properties, plus depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures.44 Heavily endorsed by NAREIT,
FFO was created to become a "standard supplemental measure of REIT operating
performance that excluded historical cost depreciation from - or "added it back" - to
The Correlation Between Market Fundamentals and Apartment REIT Performance
39
GAAP net income." 4 5 FFO was intended to allow the prices of various REIT stocks
to be compared with each other and in terms of the relationship between REIT stock
prices and FFO. Thus, FFO was to be used for determining a capitalization multiple
similar to a P/E ratio. 46 Perhaps the biggest argument for using FFO as a performance
measure is that real estate, unlike other assets, doesn't depreciate predictably over
time and certainly not as quickly as GAAP accounting implies. A building might
take 70 or 80 years to become fully obsolete, not the 30 or 40 years allowed by
GAAP.47 Due to the importance placed on FFO by industry observers, FFO is an
integral measure in the empirical analysis. FFO data were obtained from SNL
DataSource.
The percentage change is used since it is the growth in FFO that is being isolated.
This percentage change is calculated on a per unit basis in order to properly compare
each REIT on a "level playing field". Additionally, calculations on a per unit basis
help negate the effects of mergers or industry consolidation (discussed in chapter 4.1).
Net Income per Unit
As discussed in Chapter 2.1, a shift among industry analysts has occurred favoring
the use of net income over FFO. Due to this shift in analyst sentiment by major Wall
Street research firms, net income is included in the empirical analysis as a dependent
variable. Net income figures were obtained from SNL DataSource for five years
(1996 - 2000). Many industry observers favor net income because it represents
NAREIT, "White Paper on Funds from Operations", [1999].
Ibid.
46 Ibid.
47 Ibid.
44
45
The Correlation Between Market Fundamentals and Apartment REIT Performance
40
Generally Accepted Accounting Principles and properly matches income and
expenses, a fundamental accounting rule. The net income used in this analysis is after
extraordinary items and gains on sales.
As previously discussed, a per unit basis of net income is the appropriate measure
used to compare REITs in this study because it "levels the playing field".
Market Capitalization per unit
Market capitalization equals the share price multiplied by the number of shares
outstanding, for a respective year. Using SNL DataSource, historical market
capitalization information was obtained. Using six years of data, the percent change
in market capitalization was calculated for five years (with the exception of Roberts
Realty and Cornerstone Income Realty Trust, in which only three years of data was
available so only two years of percentage change information was calculated.)
Market capitalization per unit is used because it reflects how the stock market values
the equity of the company.
Cap Rate
As a measure of a REITs portfolio's yield potential, cap rate was calculated by
dividing rental NOI by the market capitalization for each respective REIT. The
objective of this test was to measure a REITs weighted average rent growth relative to
cap rate to determine the correlation.
The Correlation Between Market Fundamentals and Apartment REIT Performance
41
4.0 Discussion of Statistical Sample and Markets
4.1 Statistical Sample- REITs
The initial database included all equity residential REITs in existence as of December
31, 2000. From this sample, several REITs were excluded because dependent
variable data were not available or consistent with apartment data. For example, all
manufactured home REITs were excluded from the sample since manufactured home
rental/revenue characteristics are different from apartment characteristics and data is
difficult to obtain for the product. Presidential Realty Corp. was also excluded since
it is a hybrid REIT (not exclusively equity).
It is important to note that the apartment industry has experienced significant
consolidation over the past few years. Among the REITs studied that have
experienced consolidation over the last five years are:
*
Avalon Communities and Bay Apartment Communities, consolidated into
AvalonBay (AVB) in June 1998;
* Merry Land Investments Inc. was acquired by Equity Residential Trust in 1999;
*
Security Capital Pacific Trust and Security Capital Atlantic Inc. merged into
Archstone Communities Trust in 1999.
Where two apartment REITs merged in the middle of a calendar year, the target's
operating results (Rental Revenue, Rental NOI, FFO, Net Income, and Market Cap)
and total number of apartments held were added to those of the acquirer's in that
calendar year, providing for seamless results over the five year period (1996 - 2000).
The Correlation Between Market Fundamentals and Apartment REIT Performance
42
Several REITs have also de-REITed recently due to either low stock valuations, the
inflexibility of the REIT tax structure, increasing liquidity of the private real estate
markets or a strong desire to return to private status to avoid the pressures of being a
public company. Some examples of these in the apartment industry which were
excluded from the pool were:
*
Irvine Apartment Communities Inc. was privatized in 1999.
* Berkshire Realty Company was taken private in 1999 by an alliance of its
management team, a Goldman Sachs real estate equity fund, and the Blackstone
Group, a financial advisor and global real estate investor.
Where apartment REITs broke-up or de-REITed in the middle of a calendar year, the
target's operating results (Rental Revenue, Rental NOI, FFO, Net Income, and
Market Cap) and total number of apartments held were subtractedfrom those of the
acquirer's in that calendar year, providing for seamless results over the five year
period (1996 - 2000).
In May 2001, Archstone Communities and Charles E. Smith announced a merger
creating one of the largest apartment REITs in the U.S.. Due to the timing of the
merger (post December 31, 2000), the two REITs remain in the sample pool as
separate entities.
The final REIT sample consists of nineteen equity apartment REITs listed below,
whose portfolios contain at least 90% apartments:
The Correlation Between Market Fundamentals and Apartment REIT Performance
43
Exhibit 4
Apartment REIT
Ticker
1 Associated Estates Realty Corporation
AEC
2 Apartment Investment & Mgmt. Co.
AIV
3 AMLI Residential Properties Trust
AML
4 Archstone Communities Trust
ASN
5 AvalonBay Communities Inc.
AVB
6 BRE Properties, Inc.
BRE
7 Camden Property Trust
CPT
8 Equity Residential Properties Trust
EQR
9 Essex Property Trust, Inc.
ESS
10 Gables Residential Trust
GBP
11 Home Properties of New York, Inc.
HME
12 Mid-America Apartment Communities, Inc.
MAA
13 Post Properties, Inc.
PPS
14 Roberts Realty Investors, Inc.
RPI
15 Summit Properties Inc.
SMT
16 Charles E. Smith Residential Realty
SRW
17 Cornerstone Realty Income Trust
TCR
18 Town and Country Trust, The
TCT
19 United Dominion Realty Trust, Inc.
UDR
Source: Constituent Companies and Relative Weights in the
NAREIT Real-Time Index for July 7, 2001
4.2 Statistical Data - Markets
Torto Wheaton Research provided market data (i.e. employment growth, permits, and
rent growth) on 57 MSAs (see Appendix 1). Employment growth, in MSAs where
data were not readily available, was calculated by taking the difference between the
National employment growth and sum of employment growth in the 57 MSAs. These
calculated data were used as a proxy for employment growth for all MSAs outside of
the 57 where Torto Wheaton Research provided information. Permit data for MSAs
outside of the 57 MSAs were calculated in the same fashion.
Rent growth was calculated following two different procedures as outlined in Chapter
3.1. The following table highlights the MSAs where government and NREI data
were used. For markets that lacked both government and NREI rent data, the
The Correlation Between Market Fundamentals and Apartment REIT Performance
44
National average was used as a rent growth proxy. Note that an "x" denotes data
obtained.
Exhibit 5
I
2
3
4
5
6
7
8
MSA
ALBUQUERQUE
ATLANTA
AUSTIN
BAKERSFIELD
BALTIMORE
BOSTON
CHICAGO
CHARLOTTE
Year
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
GOV'T
RENT
NREI
RENT
9
X
X
X
X
X
X
X
X
10
X
X
X
X
X
X
X
X
X
X
X
X
X
11
X
X
X
COLUMBUS
X
12
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
CLEVELAND
x
X
X
X
X
X
MSA
CINCINNATI
.
DALLAS
X
X
X
X
X
13
DENVER
X
X
X
X
X
14
DETROIT
X
X
X
X
x
15
FT. LAUDERDALE
X
X
X
X
X
16
FT. WORTH
The Correlation Between Market Fundamentals and Apartment REIT Performance
Year
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
GOV'T
RENT
NREI
RENT
X
X
X
X
X
X
X
X
X
x
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
x
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
x
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
x
X
X
x
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
45
17
18
19
20
21
22
23
24
MSA
FRESNO
HARTFORD
HONOLULU
HOUSTON
INDIANAPOLIS
JACKSON
JERSEY CITY
KANSAS CITY
Year
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
GOV'T
RENT
NREI
RENT
i
25
MSA
LOS ANGELES
26
LONG ISLAND
27
LAS VEGAS
i
I
X
x
X
xxX
xX
x
X
xX
x
X
xX
xX
x
X
x
X
x
X
X
X
x
X
xx
x
X
xX
xX
xX
28
xX
xX
x
X
xX
xX
29
MIAMI
x
X
x
X
x
X
x
X
x
X
x
X
x
X
x
X
x
X
30
MILWAUKEE
x
X
x
X
x
X
x
X
31
MINNEAPOLIS
x
X
x
X
x
X
x
X
x
X
x
X
x
X
x
X
xX
xX
xX
X
x
X
x
X
x
X
x
X
X
32
MEMPHIS
NASHVILLE
The Correlation Between Market Fundamentals and Apartment REIT Performance
Year
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
GOV'T
RENT
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
NREI
RENT
X
X
X
X
x
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
46
1
MSA
NEW YORK
33
34
OAKLAND
35
OKLAHOMA CITrY
36
ORANGE CNTY.
37
ORLANDO
38
OXNARD
39
PHILADELPHIA
40
PHOENIX
Year
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
GOV'T
RENT
X
X
X
X
X
X
X
X
X
X
X
X
NREI
RENT
41
xX
42
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
PORTLAND
X
X
X
X
43
X
MSA
PITTSBURGH
X
X
X
X
X
44
X
X
X
X
X
45
46
X
47
RALEIGH/DURHAM
RIVERSIDE
SACRAMENTO
SALT LAKE CITY
SAN DIEGO
X
X
X
X
X
X
X
X
X
X
48
SEATTLE
X
The Correlation Between Market Fundamentals and Apartment REIT Performance
I
Year
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
GOV'T
RENT
X
X
X
X
X
NREI
RENT
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
47
49
MSA
SAN FRANCISCO
50
SAN JOSE
Year
1995
1996
1997
1998
1999
2000
51
52
53
54
55
56
1995
1996
1997
1998
1999
2000
ST LOUIS
1995
1996
1997
1998
1999
2000
STAMFORD
1995
1996
1997
1998
1999
2000
TAMPA BAY
1995
1996
1997
1998
1999
2000
TUCSON
1995
1996
1997
1998
1999
2000
WASHINGTON D.C 1995
1996
1997
1998
1999
2000
W. PLAM BEACH 1995
1996
1997
1998
1999
2000
GOVT
RENT
X
X
X
X
X
X
X
X
X
X
X
xxX
xX
xX
xX
xX
xX
xX
xX
xX
xX
xX
xX
xX
xX
x
X
xX
xX
xX
xX
xX
xX
xX
xX
xX
xX
xX
xX
xX
|
NREI
RENT
X
xX
xxX
xX
xX
xX
xX
xX
xX
xX
_I_
I
57
MSA
WILMINGTON
58
NON 57 MSAs
59
NATION
I
i
I
,,
x
xX
xX
xX
xX
Year
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
1995
1996
1997
1998
1999
2000
GOV'T
RENT
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
NREI
RENT
xxX
xX
xX
xX
xX
xX
xX
xX
xX
X
xX
xX
xX
xX
x
X
xX
x
xX
X
xX
x
X
xX
xX
xX
xX
X
The Correlation Between Market Fundamentals and Apartment REIT Performance
48
4.3 Descriptive Statistics - Dependent Variables
The following exhibit highlights the dependent variables used to proxy for apartment
REIT returns. Of note in Exhibit 6 is AvalonBay's Rental Revenue per Unit, Rental
NOI per Unit, Percentage Change FFO per Unit and Percentage Change Net Income,
which is significantly higher relative to the other 18 apartment REITs. AvalonBay's
portfolio is significantly concentrated in markets considered to have high barrier
entries and high costs of living. Specifically, AvalonBay's 2000 portfolio is
concentrated in San Jose (12%), San Francisco (5%), Boston (5%), New York (5%),
Seattle (7%) and Washington D.C (14%). This provides anecdotal evidence that
these markets are high rent growth markets, supported by Exhibit 6, which shows that
AvalonBay has the second highest WARG given both Government and NREI data.
Exhibit 6
Statistical Summary -Dependent Vxiable
Avrs
#
OverAFiveYe Period (1996.2000)
%
A Re l Revper %RealNOIper
Unit
Unit
%
A
SDen
Av
Ticker
A
SdDev
A
REIT
I AnIociaedEsaresRe.icComoration
AEC
3.28%
6.38%
2 Ap
AIV
1103%
46.39%
3Am ResidentalPropenies
AML
4ArchsioneCommunidesTnu
men nvesment& Mm Co.
2.09%
5.05% -11.9%
SIDev
%
ANenInome
per Un
AvA S dDev
[
8.96% -1.4%
42.83%
%O
fpN
Ne INaer
I
e
D6.2%
15.40% 46.63%
1663%
.9.74% 11.84%
-8.0%
12
-.
1.46%
7.89%
ASN
10.82% 23.75%
1330%
2457%
1437%
234%
5 AvanBay CommunitesInc.
AVB
4471%
42.37%
56.61% 40.13%
36.90% 509%
63.8B% 89.72%
6BRErpenies, Inc.
BRE
4.46%
16,58%
17.23%
-2.44%
2596%
65.51%
7 CamdcenPropeyTrus
CPT
31.86%
3071%
38.70% 36.52%
3413%
8 EquiyResidntialPropeies Tu
EOR
17.21% 30.04%
9Es-sxPrpen
ESS
30.08%
10Gables sdendri Trnsi
GBP
6.92%
1IHomePropedesof NewYori In.
H-M
7.23%
17.14% 10.5%
17.57% 1034%
12Ml.Amei aAparmen Communies Inc.
MAA
7.04%
2210%
8.18%
23.82%
13Pos Propenl Ile.
PPS
3.99%
22.91%
438%
22.66%
RPI
3.04%
27.94%
6.51%
14RobensR
.e
Tn.
nc.
ylnveios
lnc.
6180%
5.14%
38.84%
18.71% 2816%
59.48% 31.35%
6.77%
8.60%
364%
-0.49%
400%
%
AMrkeCap
A
0.38%
-2.72%
0.9
SdD
7.30'
A
Ru
SdD
8.86%
1.14e
19.66% 4513%
5.15%
0.96%
517
60.09
17.84% 2523%
4299
26.14%
323%
0.41%
-5.96%
6.51%
7.24%
0.71
2121%
42.42% 80.37%
6.57%
1.55%
1004%
131%
6.69%
0.87%
1.08%
1.49%
7.09%
37.31
4463S
M rCapper
.
Uni
Uni
A
S
61.91%
144.
77.06%
8.41%
3.79%
37.34% 41.47%
6.04%
4459% 134.37%
8.27%
0.65%
11.64% 19,88%
6.25%
1.185i
77.85% 149.88
3.72%
1.46%
7.80%
0.84%
42%
351%
2402%
33.89% 25.89% 21.14%
542%
.02%
1.28%
16.82% 15.88%
6.91%
1.37%
59.18
39.02%
73.32% 30.97% 48.72%
5419% 103.59
8.21%
0.82%
57.20% 119.58%
6.52%
1.01
8.11
6.30%
19.92% 22.62%
39.09% 2099%
6.01%
0.44%
3.41%
13.10
7.69%
1.04%
1.35%
19.67% 33.29
78.65% 63.95%
4.90%
0.32%
9.00%
1061%
7.06%
1.32%
3.04%
20.40
2336%
3532%
4.14%
0.20%
3.73%
8.87%
1.55%
30.26% 26.06%
8.32%
0.95%
2.10%
20.10%
6.56%
1.00%
56.51% 216.71%
5.76%
0.19
.9.99%
15.09%
8.60%
0.34%
7.97
4.75%
22.64%
.30
3.07%
31.3% 6 4.3
453%
62.54%
8.53% 23.21%
94.60%
12.91
6.59%
8.22%
15SummiPropres Inc.
SMT
8.10%
3.46%
1008%
3.66%
7.52%
4.43%
31.99% 41.59%
46.41%
45.50%
7.06%
0.85%
7.90%
12.41%
7.40%
0.81%
16 Charls . SmithR.sidentialRady
SRW
3.80%
9.75%
5.36%
10.92%
8.43%
1Z.73
52.39% 426%
79.00%
5449%
8.60%
1.27%
7.97%
1476%
7.39%
0.40%
17Cometon Reiy nom Trusl
TCR
8.79%
35.49%
9.74%
35.76%
-7.84% 47.84% -80.37% 213.37
0.97%
18Tn
TCT
444%
5.31%
467%
7.23
andCoumryTs The
19UnldDominion Ray
Tru, Inc.
UDR
ToiS AdD
TotalS De
16.59%
11.45%
12.51%
3.28%
6.01%
4471%
19.92% 17.84% 21.13% 15.08% 2401% 1.35%
12.87%
10.99%
20.67%
12.62%
14.90%
32.63%
413%
0.914
Z.86% 25.08%
9.09%
57.22%
-119.42% 267.32%
49.34%
6.97%
4.70%
0.48%
7.06%
4.57%
9.01%
0.41
3641%
22.74%
40.72%
44.74%
373%
453%
5.73%
1.8(0%
0.48
177% 19.8%
12.326%
15.98%
845%
7.43%
1.13%
1.99%
The Correlation Between Market Fundamentals and Apartment REIT Performance
49
4.4 Descriptive Statistics - Independent Variables
The following exhibit highlights the independent variables used to proxy for
apartment REIT returns. Exhibit 6 illustrates the effects of market fundamentals on
REIT performance. Of note in the Exhibit is that Essex Property Trust experienced
the highest WARG in both the Government and NREI data. Essex's portfolio
concentration is primarily located on the West Coast (Long Beach and Los Angeles
20%, Seattle 20%, Oakland 15%, Orange County 15%). AvalonBay also experienced
high WARG. Similarly, AvalonBay's portfolio is heavily weighted on the West
Coast (San Jose 12%, Los Angeles 6%, San Francisco 5%, Oakland 5%, Orange
County 5%). Camden Property Trust experienced the highest employment growth
based on market concentration. The three largest markets in Camden's portfolio are
Las Vegas (20%), Dallas (15%) and Houston (13%). Charles E. Smith experienced
the highest stock growth relative to the other REITs, which contributed to it also
having the lowest WAED. Charles E. Smith is significantly weighted in the
Washington D.C./Virginia/Maryland markets (64%).
The Correlation Between Market Fundamentals and Apartment REIT Performance
a
50
Exhibit 7
Statistical Summay -Independmt Variables
Avemies OverA Five Year Perid (1996 -200)
Oovt WARG
REIT
REff
I
.
Ticker
.
Sieker
AzrciatedEstaRealtyCorporaftion
Aiv{I
An
Aer
NREI WARG
SidDe. i{~ Ii~i~er
$
| Std~ev Avr | St~ev
A
WAEG
v
WASG
StDev'
WAED
Anv iI~
StdDv
%
Totl in MSA
%D
# f Apts
uA,
Sa D- A
Av
$Dev
dDev
8.92%
AEC
2.82%
0.70%
3.96%
0.76%
1.92%
0.26%
1.17%
023%<
0.75%Y
0.43%
72.43%
2.24%
12.32%
AIV
3.15%
0.40%
3.89%
0.566%
3.00%
0.60%
1.86°%.
0.10%
1.14%
0.60%
70.96%
5.11%
76.25% 103.65%
3 AmliR.etentlalPrtpetties. Trt
AML
3.62%
0.46%
3.30%
0.74%
3.57%
021%
2.47%
0.22%
1.10%
0.34%
96.65%
1.17%
22.30%
10.26%
4 Archtne C mm..unitisTrut
ASN
3.53%
0.4OA6% 3.74%
0.49Y
3.62%
0.29%
2.20%
0.13%
1.42%
0.37%
5.77%
5.14%
13.47%
23.97%
5 Aval.onBevy
Commuies Inc.
AVB
3.82%
0.90M
1.26%
2.4S%
0.44%
1.51%
0.12%
0.97%
0.49%
81.68%
2.05%
20.81%
22.29%
6 BREP wd.ertez
Ic.
BRE
3.55%
1.20% 4.51%
1.09%
3 5%
0.22%
1.68%
0.13%
2.17% 0.19% 96.91%
7 Caden PrertyTrcat
CPT
3.13%
0.51%
3.37%
0.79%
4.37%
0A.49%
2.92%
0.28%Y. 1.44%
0.4A5% 91.00%
0.69%
3.40
6.97%
8 EqnityResienti
EQR
337%/
0.37%
3.88°/0.
OAI%
3.29%
0.34%
2.0%
0.09%
1.20%.
0.41%
78.980%
2.24%
24.56%
27.63%
2.21%
2 Apearnetl
esment&MgmLCo.
Properties Trust
5.76%
1.02% 29.46% 30.02%
9 EtexPropertyTrut Inc.
ESS
4.11%
1.02%
6.22Y.
3.16%
0.79%
124%
0.19%
1.92%
0.80%
87.73%
1.08%
16.76%
45.65%
10 OGbe, ResidentalTrust
GBP
3.41%
0.32%A
3.04% . 1.1
3.78%/.
0A.45%
2.41%
0.35%
1.37%/
0.586
97.99%
1.21%
17.75%
15.60%Y
1 Ho e Properties. fNewYork Inc.
HME
3.03%
0.39%
4.37%
1.01%
2.01%
0.44%
1.02%
0.16%
0.99/.
0.57%
42.08%
20.59y
50.81%
33.51%
12 Mid.-AerAicAparmentCommunite,. Inc.
MAA
3.40%
0.19%
4.03%
0.61%
2.56%
0.42%
1.57%
0.1IS%
1.00%/
0.50%
52.80%
3.12%
14.98%
24.46%
13 Pot..Prpcetie, Inc.
PPS
3.87%
0.50%
2.87%
0A.47%/ 4.15%
0.21%
2.77%
0.24"%
1.38%
0.24%
97.18%
1.66%
21.71%
2413%
14 Robert Realty nvetn, Inc.
RPI!
3.43%
0.21%
2.11%
0.80%
4.18%
0.63%
2.70%
0.17%
1.47%.
0A.49 100.0%
0.00%
.85%,
22.53%
15 SummitProperti
SMT
3.3%
0.45
32Y
0.47
3.26%
0.33%
2.65%,
0.45Y
0.61%
0.34%
7.08%e 11.36%
6.99Ye
16 Chades E.Smith Reidential Realy
SRW
2.42%
1.13%
4.08%
1.55%
2.05%
1.07%
3.57%
0.37%
-1.52%
1.14% 1I0.00%
0.00%.
17.89%
8.09%
17 Corerstne.RealtylncomeTr-st
TCR
3.76%
0.45%
3.92%
0.62%
3.17%
0.46%
2.14%
0.24%
1.03%'
0.55%
62.20%
6.92%
91.17% 17421%
18 TownandCountyTrus The
TCT
Inc.
19 UnidDminion RealityTrust Inc.
85.71%
2.54%Y
1.01%
3.77%
0.991%
2.06%
0.89%
1.70%
0.38%
0.36%
0.73%
77.80%
2.37%
UDR
Total Avg
3.32Y,
3.35%
0.35%
0.65%
2.00%
2.09%
0.67%
0.22/,
1.07%
1.05%
0.75%
0.53%
65.07%
S1.25%
16.73%
3.92%
0.43%
3.07%
3.13%
0.7S%
0.39%
Total StdDev
3.87%
3.89%
0.93%
The Correlation Between Market Fundamentals and Apartment REIT Performance
2.36%
5.37%
9.41%
9.10%
24.51%
23.51%
51
5.0 Regression Results
Hypothesis #1 - weighted average employment growth and weighted average stock
growth effectively measure demand and supply growth, which should be a proxy for
weighted average rent growth.
Results: A regression analysis of WARG (given NREI and Gov't rent data) versus
WAEG and WASG resulted in statistical models that explain (see Exhibit 8):
1. 55.1% of the variance in WARG (given Gov't rent data) using a cross-sectional
data approach with 19 observations;
2. 10.5% of the variance in the WARG (given Gov't rent data) using a panel data
approach with 95 observations; however the t-stat on the WASG variable is not
significant;
3. the regression results using WARG (given NREI rent data) were not significant.
Exhibit 8
Panel Data Regression Results
Dependent Variable
Govt WARG
NREI WARG
# of Obs Indep. Variable & Coef
t-Stat
R Square
WAEG
WASG
WAEG
WASG
95 0.295090251 -0.21395749 3.244325084 -1.81772392 0.105450901
95 -0.07772166 -0.92457699 -0.5661638 -5.2044401 0.278205674
Cross-Section Data Regression Results
Dependent Variable
Govt WARG
NREI WARG
# of Obs Indep. Variable & Coef
WAEG
WASG
19 0.479364224 -0.33222551
19 -0.27577776 -0.69669975
t-Stat
R Square
WAEG
WASG
4.39489386 -2.61276007 0.551425904
-1.0480718 -2.27123058 0.407624388
Discussion: While the results indicate WAEG and WASG are highly correlated with
WARG, given the cross-sectional data, the results are inconclusive because the
sample size is less than 30. The Gov't WARG results also show there is a positive
correlation between WARG and WAEG and a negative correlation between WARG
and WASG. Interestingly, when using NREI rent data, the t-stats are insignificant
The Correlation Between Market Fundamentals and Apartment REIT Performance
52
and the sign on the WAEG variable, in both result summaries above, is negative.
Intuition tells us that as employment grows in a market, rent growth in that market
should be positive, not negative.
The results do not show conclusive evidence to supporthypothesis#l.
Hypothesis #2 - weighted average rent growth should determine Net Income and FFO /
NOI growth.
Results: A regression analysis of the variables described in Chapter 3.0 resulted in
statistical models (see Exhibits 9, 10, 11), with significant t-stats, which explain:
1. 37.1% of the variance in the percent change in FFOper unit across the sample of
selected apartment REITs using apanel data approachgiven NREI WARG and
apartment growth;
2. 26.4% of the variance in the percent change in FFOper unit across the sample of
selected apartment REITs using a cross-sectionaldata approachgiven NREI
WARG;
3. 32.1% of the variance in the percent change in Rental Revenue per unit across the
sample of selected apartment REITs using a panel data approachgiven NREI
WARG and apartment growth;
4. 37.0% of the variance in thepercent change in Rental Revenue per unit across the
sample of selected apartment REITs using a cross-sectionaldataapproachNREI
WARG;
The Correlation Between Market Fundamentals and Apartment REIT Performance
___
53
5. 31.2% of the variance in the percent change in RentalNet OperatingIncome per
unit across the sample of selected apartment REITs using apanel data approach
given NREI WARG and apartment growth;
6. 29.0% of the variance in the percent change in Rental Net OperatingIncome per
unit across the sample of selected apartment REITs using a cross-sectionaldata
approachgiven NREI WARG;
Exhibit 9
Panel Data Regression Results Excludiog %Change in Apartments
Dependent Variable
%
A in FFO per Unit
%A in FFO per Unit
%A in FFO per Unit
%A in FFO per Unit
%A in FFO per Unit
%A in Rental Revenue per Unit
%A in Rental Revenue per Unit
%A in Rental Revenue per Unit
%A in Rental Revenue per Unit
%A in Rental Revenue per Unit
%A in NOI per Unit
%A in NOI per Unit
%A in NOI per Unit
%A in NOI per Unit
%A in NOI per Unit
%A in Net Income per Unit
%
A in Net Income per Unit
%
A in Net Income per Unit
% in Net Income per Unit
%A in Net Income per Unit
Net Income per Unit
Net Income per Unit
Net Inome per Unit
Net Income per Unit
Net Income per Unit
%A in Market Cop per Unit
%A in Market Cap per Unit
%A in Market Cap per Unit
%A in Mttket Cap per Unit
%A in Mirket CaP per Unit
Market Cap per Unit
Market Cap per Unit
Maket Cap per Unit
Murket Cap per Unit
Market Cap per Unit
Cap Rate
Cap Rate
Cap Rate
Cap Rate
Cap Rte
#of Obs
I
ndependent Variable &Coefficient
WARG
WARG
(Govt)
(NREI)
WAEG
WASG
WAED
94
0.589
94
7241
94
3.767
-1.203
94
94
4.513
94
3.394
94
6.420
94
1.987
94
-3.945
94
4.371
94
3.233
94
5.823
94
2.760
94
-2.809
94
4.467
93
-14.853
93
7.642
93
6.007
93
15.776
93
-3.428
93
49.728
93
7.642
93
22.510
93
28.979
93
5.230
91
-2.881
91
13.800
91
2.563
91
-7.731
91
7.220
91
0.945
0.254
91
91
0.121
0.499
91
91
-0.178
91
-0.222
-0.412
91
91
-0.388
0.230
91
91
-0.528
t-Stat
WARG
WARG
(Govt)
(NREI)
0.135
2.983
WAEG
R Square
WASG
WAED
1.057
-0.259
1.266
0.810
2.728
0.577
-0.888
1.275
0.772
2.460
0.804
-0.632
1.304
-1.335
1.159
0.653
1.334
-0.371
3.225
0.797
1.711
1.702
0.391
-0.566
5.303
0.621
-1.463
1.772
3.146
1.383
0.473
1.522
-0.693
-1.055
-3.556
-2.329
The Correlation Between Market Fundamentals and Apartment REIT Performance
1.044
-3.248
0.0002
0.0882
0.0120
0.0007
0.0171
0.0071
0.0748
0.0036
0.0085
0.0174
0.0064
0.0617
0.0070
0.0043
0.0182
0.0192
0.0145
0.0047
0.0192
0.0015
0.1026
0.0069
0.0312
0.0309
0.0017
0.0036
02401
0.0043
0.0235
0.0341
0.1001
0.0210
0.0025
0.0254
0.0054
0.0124
0.1244
0.0574
0.0121
0.1060
54
Exhibit 10
...
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Discussion: While the strength of these relationships supports the notion that
apartment REIT performance and market fundamentals are linked, other non-market
factors seem to play a more important role.
Surprisingly, NREI does a much better job of predicting apartment REIT performance
over the last five years than does the government's, whether using a cross section or
panel data approach. In fact, none of the regression results using the government rent
index yielded results that were significant. Simply using the difference between
current weighted average job growth and weighted average stock growth works better
than the government index and about half as well as the NREI. The results from the
10-REIT sample (see Appendix 16 & 17), constructed from the 10 apartment REITs
with the greatest portfolio concentration in MSAs where government rent data were
The Correlation Between Market Fundamentals and Apartment REIT Performance
56
available, show that the failure of the government index to work has more to do with
the index than the coverage.
A Review of Statistically Significant Variables
NREI - Weighted Average Rent Growth (WARG)
The regression results show that the NREI - WARG, when using either a cross
section or panel data approach, does the best job of predicting FFO, Rental
Revenue, Net Operating Income, and Market Capitalization.
The intuition behind these results is straightforward. FFO, Rental Revenue, and
NOI all grow according to what rents are doing in markets where REITs own
properties. REITs that have a high portfolio concentration in markets where rents
are growing rapidly will show strong FFO, Rental Revenue, and NOI growth. We
postulate that the NREI data does a better job of predicting apartment REIT
performance over the last five years than does the government's because of the
differences in how indices are constructed.
The government rental index includes not only larger multi-family rental
properties of interest to institutional investors, but also single-family rentals and
small multi-family properties. These smaller properties may perform differently
from the institutional segment of the market. The NREI, however, excludes the
smaller properties and looks only at class A and B properties, those most likely to
be held by apartment REITs or institutional owners.
The Correlation Between Market Fundamentals and Apartment REIT Performance
57
Weighted Average Excess Demand (WAED)
Weighted Average Excess Demand, the difference between employment growth
and stock growth, was statistically significant in some models. Interestingly,
WAED does a better job of predicting REIT returns than the government index
and works about half as well as the NREI.
Percentage Change in the Number of Apartments
Because of the noise created by apartment unit accounting discussed in Chapter
3.1, this-variable helped reduce the volatility in REIT returns, resulting in higher
R-Squares across the board. For example, the statistical model which represents
FFO growth per unit goes from an R-Squared of 8.82% to 37.1% when apartment
growth is included in the regression.
A Review of Non-Statistically Significant Variables
Government - Weighted Average Rent Growth (WARG)
In all but a few cases the Government - WARG variable resulted in insignificant
t-stats (i.e. 2> t-stat >-2). As previously discussed, we believe noise inherent in
the construction of the government index is diluting its effectiveness. The
inclusion of apartment growth in the analysis, however, did improve the RSquared in each case, further supporting our theory that apartment unit accounting
is skewing per unit growth rates.
The Correlation Between Market Fundamentals and Apartment REIT Performance
58
Weighted Average Employment Growth (WAEG) & Stock Growth (WASG)
While WAEG and WASG were not predictive measures of apartment REIT
returns, the signs of these variables indicate: (1) As MSA employment grows in
areas where apartment REITs are heavily concentrated, their returns are positively
impacted, and (2) Stock growth and apartment REIT returns are inversely
correlated.
The results show conclusive evidence that FFOgrowth and marketfundamentalsare
correlated,albeit the relationshipis not as strong as anticipated
Hypothesis #3 - FFO growth should determine a REIT's market capitalization growth.
Results: A regression analysis of the variables described in Chapter 3.0 resulted in
statistical models, with significant t-stats, which explain:
1. 37.8% of the variance in the percent change inMarket Capitalizationper unit
across the sample of selected apartment REITs using a panel data approach given
NREI WARG and apartment growth;
2. 59.6% of the variance in the percent change in Market Capitalizationper unit
across the sample of selected apartment REITs using a cross-sectionaldata
approach given NREI WARG; and
3. 39.0% of the variance in the CapitalizationRate across the sample of selected
apartment REITs using a panel data approachgiven NREI WARG and apartment
growth
The Correlation Between Market Fundamentals and Apartment REIT Performance
59
Discussion: While the empirical results presented above do not directly address the
issue of FFO and stock price correlation, previous academic research does. As
previously stated, Fields et al. (1998) showed that FFO explains 57.8% of the
variation in price, which is less than the 61.3% explained by the model including net
income. "However, the Vuong test statistic is 1.55 with an associated two-tailed pvalue of 0.12, suggesting that the explanatory power of the two models is not very
different."
Previousacademic research does show conclusive evidence that FFOand market
capitalizationare correlated. The cumulative effect of this thesis' results tends to
validate the notion of reasonable REIT pricing.
1. weighted average rent growth explains 37% of FFO growth, and
2. FFO explains 58% of stock price.
Our empirical analysis supports these findings: weighted average rent growth
explains 38% of the percent change in market capitalization (stock price). The
model, when using a cross-sectional data approach, explains 60% of the variance, but
lacks sufficient observations, with only nineteen.
5.1 Additional Research
Overall, a statistical model explaining 37.1% of apartment REIT per unit FFO growth
is intriguing. The fact that the NREI does a better job than the government index at
predicting REIT returns, however, is more enlightening. Additional study on a larger
sample with better apartment unit accounting would provide important insight into
The Correlation Between Market Fundamentals and Apartment REIT Performance
60
our results. Furthermore, more empirical analysis on the direct correlation between
market fundamentals and stock price appreciation / yield could support the
conclusions and highlight a more global perspective on reasonable REIT pricing.
The Correlation Between Market Fundamentals and Apartment REIT Performance
61
6. Conclusion
This paper examines the correlation between apartment REIT performance and
market fundamentals. Through a review of relevant literature and informational
interviews with academics, the components of REIT performance were defined as: (1)
FFO growth, (2) Rental Revenue growth, (3) Rental NOI growth, (4) Market
Capitalization growth, and (5) Cap Rate. Market fundamentals were defined as: (1)
Rent Growth, (2) Employment Growth, (3) Stock Growth, and (4) Excess Demand.
Components of market fundamentals were then empirically examined to explore and
quantify their impact on REIT performance. Independent variables were developed
as proxies for market fundamentals, such as weighted average rent growth, weighted
average employment growth, weighted average stock growth, and weighted average
excess demand. Dependent variables were calculated based on data obtained by SNL
DataSource.
The analysis revealed that weighted average rent growth (given NREI data) and
growth in apartment units explained 37. 1%of the variance in the percent change in
FFO per unit across the sample of selected apartment REITs. The results also show
that NREI data does a much better job of predicting apartment REIT performance
over the last five years than does government data, whether using a cross section or
panel data approach. The failure of the government index to work has more to do
with the way the index is constructed than the coverage. Finally, weighted average
excess demand (WAEG - WASG) works better at predicting FFO growth than
The Correlation Between Market Fundamentals and Apartment REIT Performance
62
weighted average rent growth (given government rent data) and about half as well as
the weighted average rent growth (given NREI data).
The market capitalization results tend to validate reasonable REIT pricing. The
results show that weighted average rent growth and apartment growth explain 38% of
the variation in the percent change in market capitalization when using a panel data
approach, and 60% when using a cross sectional data approach. These results, when
taken in the context of previous research done by Fields et al., confirm the rational
link between market fundamentals and REIT stock price returns.
The Correlation Between Market Fundamentals and Apartment REIT Performance
63
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The Correlation Between Market Fundamentals and Apartment REIT Performance
66
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13Cl
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I xvpuaddv
Appendix 1
Market Data -Employment, Stock, Rent, Excess Demand
·i --~:,:_:~..'.~...:~'..j?.:i
EMP
MSA
7
Yer
Gien
CHICAG
CHICAG
CHICAG
1988
1989
1990
3558.4
36395
3707.6
CHICAG
CHICAG
1991
1992
36725
3631.9
8ivu
0
CHICAG1993CHICAG
3684.6
CHICAG 1994
3763.3
CHICAG
1995
3890.8
CHICAG 1996
3947.1
CHICAG
1997
I 4006~7
1998
4093.2
CHICAG
CHICAG 1999
CHI C 4164.3
AG
CHICAG 2000
4209.2 ..
PERMITS
STOCK
Gave.
Calejard
10188
7862
6162
910142
3233
416?
924166
927399
18
6N
CIC~ 1W7 00.7 ':ii:
~.'"~
L":!!ii
~.
~8850
8
CHRLTE
CHRLTE
1988
1989
591.3
611.6
CHRLTE
1990
627.2
CHRLTE
CHRLTE
CHRLTE
1991
1992
1993
614.2
6154
639.1
CHRLTE
1994
6724
CINCIN
CINCIN
9 CINCIN
CINCIN
CINCIN
CINCIN
CINCIN
CINCIN
7210
7462
765.1
807.1
825.0
1996
8164
CINCIN
CINCIN
CINCIN
CINCI:
1997
1998
1999
2000
837.5
854.9
868.9
890.3
CLEVEL
CLEVEL
1988
1989
1017.2
1050.1
10 CLEVEL
1990
1067.1
CLEVEL
1992
1037.1
1995
1097.1
CLEVE. 1996
1114.2
CLEVEL
CLEVEL
1997
1998
1277
1149.3
CLEVEL
1999
1165.3
CLEVEL
2000
11763
COI5.0
COLUMB
1988
1989
655.3
679.9
CLEVE
4.
~*4j:
..
1992
~
3579
2192
2457
2092
2936
2619
2572
2714
2702
2159
3172
2406
:
i
10465
i]
3
.f ..
.. !
:
COLUIMB 1994
7453
N
Cakleltd
463.31
48700
5.11%
579.25
598.50
3.32%
50934
525.24
4.59%
3.12%
600.25
634.08
0.29%
5.64%
:232%
3.21%
4.15%
299%
4.04%
3.94%
3.89%
3.59%
0.00%/.
390.83
.0.15%
0.00
.
0.00
0.00
0.00%
0.0/.
0.00%
387.33
400.17
423.50
-0.90%,4
3.31%
5.83%
0.00
44&00
5.79%
0.00%
0.00
10.41%
3.32%
291%
0.00%
481.25
524.42
533.17
527.92
541.33
0.00
7.42%5
8.97%
1.67%
.0.98%
254%,4
0.00/.
359.33
36700
30166519
38097
.:
393.57
399.87
409.73
423.15
213%
3.81%
3.31%
1.60%
2.47/
3.28%
421.17
421.17
427.58
42292
438.08
450.92
465.50
.1.09..
179452
431.09
1.88%
494.08
6.14%
181500
184202
186361
189533
43848
448.07
461.21
75.73
1.71%
219%
293%
3.15%
541.92
544.83
553.58
0.00
9.68%
0.54%
1.61%
0.00.
~,,~_
7
161870
1640692
168611
171547
174166
176738
240918
2773
·
t
39222
2'
494.08
481.25
-3.62A
44579
3.27%
400.08
-283%
260%
509.83
6.20'0
1863
246489
29262
'2
0265
251385
46521
478.68
1.71%
290%
541.33
536.67
6.18%
-0.86%
1353
253248
4246
288%
566.42 5.54.,
1123
1168
254601
255724
509.07
533.19
3.37%
4.74%
592.08
599.08
1077
256892
54259
1.76% 637.00 6.33/.
1252
257969
560.13
3.23%
12
1120
25026.5
1
7.38
:::
201101
0
.
.
....
.
$
i'~jil
i
*
.....
..
..
''
499.33
6.33%
1003
"
3.59%
293'/.
3.23%
3.51%
431.69
L
*
0.00%
1.52%
40000
245326
1
391.42
000
0.00%/
i"MI-~
[
3.22%.
;:PW~:~
ii'':ii/;ii'i~':;i'!:ii:.";iii
:~"-..t524
.654.50 '
680.75
4.01%,
721.58
6.00%4$
721.00
-0.08%./.
. ', ""."ii
(":5ii!
' i
733.25
1.70%
80208
9.39% .
829.50
3.42%
0.00
0.00%,
0.00
46430
51264
52964
545.07
0.00
NN
1163
5611
4223
'':
*~:
141154
144875
150818
155952
160260
166791
1450
0.00
4
267%
"
i
:
4.53%
1.
000%
398.42
396.67 044%
20532,
208977 {
20897
ZCBP77
000
0.00%
211229
0.00
.00
0.00% 408.92
3.09%
QOO
~~~~~~
0.0~,4
40.2
,.09./
.
000
0.00%
405.42
-0.86%
3808
214168"X
0.00
0.0/.
42292
.
4.32%
3890
217976
000
0.00%
447.42
5.79./,
6899
237356
539,94
0.22%
517.42
5282
244255 :
0,00
.
0.00%
0.00
424877
2241
430316
438.3
45384
453.84
473.36
.55%
3.55%
4.30%
407.75
40
430.505.8 5.58
441.58
257%
433440
48293
202%
453.25
264%
CULUNB
~~~~~
i~~~~~PZ
m5.2
22fZ
705.2
2939
7209
RENT
Giv.:
0
137581
2025
2958
697.1
,
3653
7022 iiiiii{W{i:.i
~iii~i~i~i~
,.
2252
7OZ2
COLUMB 1993
RENT
.66840
{i~~;...
.8.ao
i:'...ii~j
.'. ] 69243
133472
135006
136159
t
~
1993 1993~
1 ~~~~
'24
~1068.0
:::'..
n",
1994
:::::*:
1990
11 COL0B
COLIJME 1991
1901
COLUMB
COLUME
3573
RENT
Caul.ed
537.43
554.69
57770
'59496
618.99
643.35
124364
1534
15
1422
:'...:.:~''.
3:21
372
3721
5943
$itA!.'L.'}'"..5134
.
4308
'
6531
"
".
7400
CINCIN
CLEVEL
CLEVE.
:
.
702.6
7323
7523
754.1
7526
759.6
778.5
796.3
1991
:
931566
937162
944169
952238
961727
970577
978977
990107 ii!
3077
..
:
1988
1989
1990
1991
1992
1993
1994
1995
CLEVEL
.
4430
6031
704.3
~~~CHRLTE
704~3 19954A
CHRLTE
1995 ]
CHRLTE 1996
CHRLTE1997 [
CHRLTE 1998
CHRLTE1999
CHRLTE
CHRLTE 2000
8406
M:{..".
11130
10942
'
:'".
NREI
GOpT
Gwen
~~~~~~~~~~~~~~~~~~931566
5588
5596
7007
8069
9489
"
ki~a6~ivd~
NREI
GOV'T
RENT
*'
Z
221866
D000 0.00% 455.00 1.69%.
~CC~LUO:
1995 777:7:3906
7922
:::
4502
225772
5228
0.00/
469.00
3.08%
807.2
:!°".'.. °:i.::
2699
273.23%/
230274
!
52587
0.55%/
484.17
COUM
,997 8321
802
"
.
3383
233973
494.08
205%
COLUW
1998~~~~~~~~~~~~~~~~~~~~~~~~~~z5,
8.18 53875 245% 4411
zo5.,
COLUMB 1996
COLUMB 1997 [
CIL0MB1998
COUna4
1999
854.1
·
COLUMB 2000
8652
:
DALLAS
DALLAS
12 DALLAS
DALLAS
4i91 .
...
I
"
:
4.72%
1988
1989
1990
1991
1349.0
1373.4
1403.0
14180
:::.::::::
1399
538
4901
4901
3124
DALLAS
1992
14196
''N
1862
DALLAS
1993
14525
4386
435302
49309
223%
478.92
5.60%
DALLAS
1994
15029
10166
439688
51241
3.79%
498.17
4.02%
11475
10612
14045
17136
12716
6395
449844
461319
471931
485976
503112
515828
531.54
54788
56939
597.28
62239
646.69
3.73/
3.07
3.93%
4.90/,.
4.20%
3.90/%
50.83
534.33
565.83
581.58
585.58
0.00
234%
4.81%
5.9%,
.
278%
241%,
0.00/.
DALLAS 1995
DALLAS 1996
DALLAS 1997
DALLAS 1998
DALLAS 1999
DALLAS 2000
1579.7
1633.6
17225
1808.4
18895
1947.4
..
'':
~::::;':':.:
:
..
::i:i....:::i
2
.
0.0
:::i41:::i
The Correlation Between Market Fundamentals and Apartment REIT Performance
Lr
.
J
.
"
68
Appendix 1
Market Data -Employment, Stock, Rent, Excess Demand
MSA
DENVER
DENVER
13 DENVER
DENVER
Year
EMP
GI
GivnG'de
1988
1989
1990
1991
904.8
923.7
942.8
9638
1992
985.4
1993
1994
1995
1023.85.4
1065.7
11144
DETROI
1988
moran;r~r 10ORO
14
1905.0
18498
18412
18749
1930.7
DETROI
1995
1985.1
DETROI
1996
2033.3
.
39
4673
3352
2916
3263
3707
MIIKW'::.
>.
,
.
x"'i"'"""~'
''~i
.
..
3477
37
2998
4399
" .4:ir
.
i
2073.4
2106.5
'
DETROI
1999
21298 .8
DETROI
2000
21703
FORTIA
FORTLA
1988
1.
476,1
5007
4
%
'
. '
:
:
iii..i*i! '*
A4''
GOV'T
RENT
Given
GOV'T
RENT
Calculted
N
RENT
Gwen
430
43000
44203
0.00/.
403.67
425.25
433.42
5.35% :,l'.
1.92%
2.80%
3.99%
487.08
1238%
7.24%
5.45%
4.94%
5.81%
530.83
56.25
593.25
603.75
8.98
10.44%
v
1.19%
1.77%
.67468 6.32%
6.36%
717.60
691.25
0.08
6.18%
459,68
49298
51985
5455
w..4...'577.21
......
63.57i
27200:.9i
280330
28652 '.*2~S
44
8
.:I4
'.,'
.
499714
03191
'",0**
507068
510066
45600
4.28%
497.00
0.24%
463.68
465.69
477.05
486.07
1.68%
0.43%
Z44%
1.89%
508.61
501.08
508.67
550.67
235%
1.49
1.51%
8.26%
494.42
1.72%
57.25
3.92
:
510.45
3.24%
589.75
3.06%
522.15
53818
2Z29%
3.07%
592.08
613.08
0.40%
3.55%
514465
.
554.22
Z98%
626.50
2.19%
3437
517864
S
577.27
4.16%
0.00
0.00%
575.00
236%
449.17
-1.79%
595.10
3.50%
479.50
6.75%
61225
288%
498.75
4.01%
160824
561.76
:14113
1701
173680
FORTA
1992
505.7
2024
175381
PORTLA
PoRTLA
FORTA
FORTLA
PORTIA
PORTI.A
1903
1994
1995
1996
1997
5304
5539
5779
5998
617.2
3156
177405
637.25
4.08%
548.92
10.06%
5061
180561
67206
5.46%
57225
4.25%
4682
4835
5487
185922
190304
195139
691.67
71373
72843
Z92%
3.19%
206%
560.58
583.33
597.92
-204%
4.06%
259(/.
1998
FORTLA 1999
6350
650.9
FORTLA
2000
669.9
FORTWO
FORTWO
POR TWO
1988
1989
548.4
561.7
5900 o
<%?"'~l
}[?.i5l
?":i? 4.l"
741.18
1.75%
597.33
.0.10%
749.51
762.75
1,12%
1.77%
609.58
0.00
205%
0.0(9/.
194724
414.14
FORTWO
PORTWO
1996
671.5
593.9
7299
1997
FORTWO
1998
FORTWO 1999
4..
:
757.8
3:;!;'.
1.07%
0.00
3683
203685
5{
38.00
3.93%
0.00
0.08%
5285
207368
59426
4.9WI.
0.00
00k%
2393
212753
588.07
4.20/
000
0.60%
611.04
3.91%
0.00
0
2000
7832
2216
215146
1988
1989
1990
220.6
227.9
238.4
889
2274
94891
FRESNO
FRESNO
1991
1992
2503
248.6
872
835
98646
99518
PRESNO
1993
2
509
100353
FRESNO
1994
257.2
1053
100862
FRESNO
FRESNO
FRESNO
FRESNO
1995
263.5
1243
101915
1996
270.3
371
103158
1997
1998
273.1
275.6
FRESNO
FRESNO
1999
2000
284.0
295.5
1988
19809
1990
1991
658.4
6579
6456
6201
:
.'
..
j:"'~
*40
.......
:
,
/
.
439
600.1
1993
597iiii!::
1993
RT
5970
4...424
HARTFO
1992
HARTPO
]ARTFO
HARTFO
1994
1995
1996
5874
5910
58%,4
TFO
HARTFO
HARTFO
1997
1998
1999
601,0'
605:9
616.6
HARTPO
o...'.'40%
::
2OO
619.0
4*'
..4:..
.':
.
,
103529
103842
104290
104780
1179
1725
415
215
1k656000
1-01
o1o
100859
350
101074
325
54
260
9,00
101424
101646
101971
102025
*94
'285
199
:
.
.j
A#
:i276i'
ii.4?.'
Ng..
".4J5%
4.:
12"
4flf
:
: "'..
.
$414
'
f9*
1%
.~p
,$
102285.
102829
103777
104072
*
1.%
?".. A!.
$4.
:.'..::.f " :i~iii
l .....
'..iai!~ii!:.'i."i..
'~!ii~
0.60%
0.00%
0.00%
.2.0
".
*lh
OO.
0
0.00
*
)Q
:*.
:.:':x.:'.4i
0.00%
0.00
0.00
.00
0...14%.
.... 000
.000
0.00
. 00
0.09%/
0.00
0.00%
0.00%A
000%
0.099k
0.00%
000D
0.00
0.00
0.00
2 f
0.00%
0.099 : o %o %
0.00%
0.00%
0
o.O
8.00%
0099.
0.0
0.00
oM.o.
.0
0.00%
0.00%
000i.0a¢.
0.00%
0.099k
0.0
0.00
.5'!ii
... 'i.-:
'~ii~.
.. 'i:Ai:..:!..:.,,.~:i'
,
0.00%
$.3......<..%3
A
. i[
W
:
.
0
98719
.
$,~
{.{..:.
.
0.o%
0.099k
0.00
%
,OM.000
490
346
544
RMS.""''
000
13 ::-.
448
1~~~~~~~~~~~~~(:¢
'1990
'"8'.'TF415
HARTFO
HARTPO
517.67
0
0.'.481
4
$f.>
..... 4f3l
*
502z243.73./ o.oo 0.oo%/
*4$
201010
FRESNO
FRESNO
FRESNO
'.' i
i40'v'
I0
.
..
.
..
0.00
o
0.09':
42e.82 3.54%
:
,$834
.:::
0.00
0%
...
447.27
4.30%
195161
0.099.
:yW*:: :::*SA
459.30
202%
0.00
196065 .. '4''
0.00
0.00%
466.47
2.23/6
196089
196089
'iiiii:i[.".[...
.
0.00
0.0".
.48416
3179%
196490
. .......... %~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~:'~t:""!
~~~3042
197968
2675
...
11
11
FORTWO
HARTFO
HARTFO
18 NARTPo
.x:43:..
20D626
204356
207795
220
109
FORTWO
645.9
1995
....
3730
iAi:::d::$*.w~.]
328
... 904
595.8
24
589.7
-m
. 401
6060 :[i~iii~:
FORTWO
1993606.0 1478
6228
FORTWO
.. $
3439
2559
1900 I
1991
1992
1993
1994
PORTWO
;"'::::::
~
457.33
5292
507.0
i!i
l
%..
oar,'.6
1991
5136
vlou
ddhed
.... "'
65.0,i0iiii%!.
3399
8067
7564
Wit
495.83
437.3
474985
486476
489828
492744
4
7
NEI
WRr
RENTd
Calculted
FORTLA
FORTWO
FORTWO
17
251805
256418
261608
7955
618
1990
15 FORTLA 1990
16
4618
5199
1858.4
iRQO
5
1991
1992 i
1993
1994
1997
1998
247878
248116
6192
DETROI
DETROI
DETROI
246690
238
1553
1291.0
13409..'$*t
DETROI
DETRO!
DETROI
DETROI
tSdl
Ca.ulte
2068
1075
113
. 444021
.5*1*'*~.
.
STOCK
277
24787B8Z
~~~~~~~23
.4fl.......
'W"%f
DENVER
1996
16
DENVER_19'
DENVER
:':':::8i
'1':3.01145
1999
..
a
DENVER
DENVER
DENVER
290
'
~3.8
~440%
DENVER
DENVER
DENVER
F*4
PERMITS
I
-
'
4%
00
0.00
. OM..".'.0
0.oo222
0.00%
0.00
0.009k
0.00%
0.00
000%
0.00
'000
'f
o
00
000
0.00
0.
O
0.00
0.00
.t..:.::::
000%:
0.00%
0
M{.-'/.:.::'
Qak
0.009
'
oMk
41i*
M*
49
:
'47111
'$"
00k
0.099k
0.09
0.00
0.00
0.08
0.00%...'
0k
*
0.00%
0.00%
0.00
0. M
The Correlation Between Market Fundamentals and Apartment REIT Performance
444.fl~.- .....
.. 44$... ...- fl$
¢0:'
i-
.
69
t...%}
Appendix 1
Market Data -Employment, Stock, Rent, Excess Demand
:2:·:·:·;f··:·f:·:·:·:·:·I·I
%A
a
MSA
V
HONOLU
1988
HONOLU
1989
19 HQNOLU
2890
HONOU
1991
HONOL
1992
n
3727
388.3
404.4
416.1
5
Z
416
411.8
410.9
HONOLL
1996
406.1
HONOL
1997
HONOL
1998
45
4039
4012
419
HONOLU
HONOL
1999
2000
396.6
4023
HOUSTO
HOUSTO
1988
1989
14255
1480.1
HOUSTO
1996
1997
1998
1999
875
140023
"
894
140898
141792
5"
1988
1989
662.8
693.
INDIAN
INDIAN
INDIAN
INDIAN
INDIAN
INDIAN
1990
1991
HOUSTO
1992
1994
1995
1993
1996
718.0
1.
2064.3
2000
7229
764.7
791.9
739.4
HINDIAN
1996
1998
8..72
84.2
421.4
JACICSO
JACICSO
JACIUSO
199
419.6
420.3
431.5
JACOSO
1994
JACKSD
JACKSO
1995
1996
1991
1993
55
44.
$
10337
556355
560749
571916
7672
602966
"
$$~UX
167S97
4
127
17291
17239
M]2W6
173326
1716~'$.
178121
17468
!13033
:~!~ij~ji~
:
~
190726
193815!
18710S
2777
1899
118322
~~j~
Ri
22
3831
1248
136280
18402
0.16%
0.00
808.93
799.5
-0.85%
-1.
0.00
1016.75
r
0.OO
791.51
785;41
.098%
0.77%
1020.83
0.00
2%
0
'
a
1::.'
:
*
f
...
0.00%
0.40%
0.00/.
%
.
431':':''
487.25
0 38%1.::s.
649,
542.50
~
.' .
46550
..:"
n
:9*E::i*$.:
%....
.
~
~
000
595.935
9.4
38128
310
0.001/
3/~
138%
:k
0.00
0.00
0.00%/
0.00%/
0.00%
448.58
45208
40250
122%
11.45%
0785'
B%
4 07%/:
-i4E~i~4*fM$~I
53330
54413
0.00%
03
470.17
400%
52968
0.00
5860
.5n
0.00%
266%
51.67
0.00
498.17
3515'
%
0.00%
4.79%
5
'
-
1897
03642
1998
199
1999
1991
501.86
523.1
2980.4
532
2845.0
'
"~il
.
0.00%/
0.00%/
0.06%
0.00%
%OD/
50670 0.00 0.00%
4.41'!%
408.25
421.75
422.33
0.99'!
0.84'!
0.14.!.
424.08
443.33
44 .33
041%
4.545'$%:s::.,i
4
o:
~
~ ~
'?1/6
'
...$u*.%x :x.~q
.i.... -.
*~j~it4
1
JERSEY
JERSEY
1094
1995
3011.5
2824.8
2894.0
*$~ %
3221
3678
133789
564.79
150631
15296
. .oo 4.58
m1.
*i0-
670.37
88.2
0X
905
20
,-,ourroY
19
156630
......... 43'
20.7 ~Qi~i;ii!"-_~
707.68
...................... i.:~3543
31035 7127
59~2~ ~I~
58.,4
................. 419.
$
%
3436
159133
"'*:1
731.89
KANSAS
KANSAS
JERSEY
JERSEY
JERSEY
24 KANSAS
JERSEY
JERSEY
1988
1989
1996
1997
1997
1999
1998
1999
KANSAS
1994
KANSAS
1995
755.4
771.6
2904.3
29.
2967.2
73
3034.2
!!i2!!.'.
30924
...-- 2000
% -.
J~ERSEY
3147.5
*
1333s
72
4724
5271
7117
828.1
8569.7
1673
2917
76049
77722
2649
4116
80639
KANSAS
1996
KANSAS
KANSAS
1997
906.5
KANSAS 777.4
1991
1992
KANSAS
1993
KANSAS
KANSAS
KANSAS
871.2
OR
'47870
;
000
.07/141067
.0
5,~5
0.00
628283%
3.42%
1.52%
3.42%/
7810
.5'"'N$.----'3.25%
815,24
4.32.:
4269.400
75689
46336
0.00
1.55%
233%
395.50
0.00
0.00
0 00!
0.0,
572
3' 22%
3.835'
369%
475421
1.95%
44275
3.97!%:
=1~
~~ ~ ~ ~ ~ ~~~8.80
4.68%
3.72%
53958
554.17
31
270%
540.81
560.95
32·,
0.0
.......r
.......~JiD."
-.:-0.
.
..
....
Po-
4.875%
3.27'!
,
-
000%
DD/.
0 005'
464.33
479.50
87404
91089
i
..
3-695'%i:
0o
--
506.82
523.25
410.67
425.83
3685
5060
$
0.001%
3.72%
4.06%
4.189/
083%/
Ih$.....
...49i:~
5%.O·/
4960
5.. 64
443.79
798207
934.4
97.14
9571
'
.83288
~~~818
73525
~
744748
786.9
1998
199
1999
s
162569
167293
172564
2 49-249!
4
~:'
:
".!':t:
96249
;· ·
.
"..."":.-.-!
-/
6970
.'
396.67
414.17
.
1989
.- '
"
~ 134
1595
132233
~ -5854653041
4.68%
,0,,7
4.37%
49292
0.00
0.
00':
6.15 3%
0~42.00
150m
39.2
-1.·0
6 4PW'i
1794
3196
133828
14059
.
3552
54I~
54120
,ANDA
1532
135622
59694
205%
1992
143955
[. 2785.0
5.69%
495.83
7=9~~ii
56302
0.595%
0.00
4.01%
61758
0.
504.58
346%
1.nov. ......
JERSEY 1992
0.00
000
::::.:::
KANSAS
"
.......
'.. 9
139174
era
2107
73525
~~~~~~~135
145487
000
637.42
3.215
000%
0,
00%
0.00
$ X02
7981
907
7514~~~~2
JERSEY
1993KANS"
~ 6.oo0.~,,o
2801.6 1993
:::-""' ':: :
307
475
14.009 35
1M.s~%
2%
0.00
oo%
ODi1'/.
,ANDA 14KANSAS~~~~~~~~~~~~~~~19
I2.
760
:"'::
2917
17
m22
.1~.KANSAS
3~~~~~~o.
419.5
.5·,7
4027./. .
4--.3.'".'"'.0ii
i8i. ~ii
JERSEY
o .....
1988
~ 1996
2948.8
~~~~~~
871~~~~~~~
~~~~~~
83,,19 ~~~~~~~.
8137
"!i478.70
.72 /. 47
0.9.50 .....
.
IERSEY
JACICSO
KANSAS
JACICED
23 JERSEY
JACK
JERSEY
ACKSO
.
;$3flqt::/
1IJt
4<
~ 395.50~
000
.
0.00
000
C
.P
.0
0.00551
0.00
0.00
0.00
:I.'6~
0.00/.
497.58
534.92 7
56:.058
0
$$~
.44$........
1
4tdwkntC
37333
0.00
"
46.1298..'~AJO
474.0
491.2
815.00
~0
D
C"..p:
-0.00%
......
124405
0.00
0.00%
0.00
**M00
2177
545
491
000
0.00
0.00
595.43
875
~~ ~
181473
2
3M2649
3621
3.1
2489%
0.59
S~~~~~~~~~~~~~~~~~~~~~~~..
51292
262%
524.02
2 16%
:
536.72
23%
:*5*..556.15
3.6rh
578.77
4.07%
592629
2044
93
7672
1355
1945
3352
149S
814.59
4:: .
n'-KA(t
2383
2r750
0.0%
........
f'.!'
. iii.:*-
Clcultd
0.00
0.00i
0.00
378.04
SSIOIS
199
85866
~INDIAN
1999
87.8
JACICSO INDIAN
1980
HACSOL 199
JACICSO
1990
W
11157
20713
8,5772
:
Gien
9.26%
8.74
6.22%
790.20
529373
..'..
.
606.81
663.00
720.94
7
"*"
142121
142600
741
2118
4025
~~~~~~~~:i·:is~'
4108
22
'809.80
323p
.237
206
INDIAN
INDIAN
INDIAN
INDIAN
133902
135397
137569
124863
479
HOUSTO
1791339
18603
19592
20237
HOUSTO
INDIAN
1495
2172
2454
:-5
-
1994
16873
:::
19HOUSTO 17499667
HOUSTO
HOUSTO
HOUSTO
INDIAN
12812
231107
M
HONOI1993
1994
1995
RENT
O
.i.S-1·"I"·.
· ..... ·
~:Xtd.~C~i~flS/.l:
Given
Calculated
1341
1876
1453
2915
2795
*
~417
LJCtlearted
N
NREI
;NE
NREI
RET RENT
GOV'T
RENT
:*
STOCK
*''~n*.4
umtS
HONOLI
HONOLU
HOUSTO
21
PERMITS
P#
M
V
.:..'A.'.:::
't/
:
::;
JI/
$%$7
.
OM/
The Correlation Between Market Fundamentals and Apartment REIT Performance
*W
%'
-
,
70
Appendix 1
Market Data - Employment, Stock, Rent, Excess Demand
\ *~~$!$~i~$~.1
56 A
EMP
STOCK
1515729
LANGEL
LANGEL
1988
1989
4013.2
4103.5
32313
24765
2LANCEL
LANGEL
1990
1991
4163.8
40178
..:"/,$.!,'i
LANGE!. 1992
38392
*(sI~~W
37425
3690.0 .- '.4*
16090
8505
LANGE!.
LANGE!.
26
i
PERMITS
1993
1994
1995
LANGE!.
LAGL 1997
1996
LANGE!.
3737.5
3760.3
2838.1
LANGE!.
1998
3919
LANGE!.
1.AINGEL.
1999
2000
LISLAN
LISLAN
LISLAN
1988
1989
1990
LISLAN
LISLAN
LISLAN
199.1103
1992
1053.5
1049
LISLAI4
LISLAN
LIS!AN,
1994
1995
1996
10618
LISLAN
1997
11120
1999
LILN 1999
LISLAN
1139.5
11804
LISLAN
20-O
12126
LISL.A1
LVEGAS
L'VEGAS
-
39705
4058.2
2909
2876
~$
4803
1585350
6977
1590153
1597130
....
:j5$9:
;f"R''.
1...
1089.9
~
,19
4
~
*?
4.
..
1168
912
446
166420
167332
176
38
446
4481993
1678
167954
167992
942
1
168440
169382
169718
1018
170977
ii*4*.
*
'
:v...o..
196971
689
7090
171995
172684
1513
179774
16967
11818
125904
;:
,
.
WE
RENT
56 A
WE!
76242
675.88
684.23
685.55
686.86
744.92
737.33
728.58
747.83
77233
693.79
690.82
7-0.45% 67.024068
264%
76.0
821.33
864.50
-68
/.469.
7.07%
5.26%
945.00
9.31%
989.33
0.00
4.69%
0.00/.
5.69%
0.00
0.00%
8020
828.08
849.74
.40%
3.21/.
262%
0.00
0.00
0.00
0.0%
0.00%
0.00%
870.88
894.0.
9.35
0.00
0.00
0.00
0.00
0.00
049
00
:6
0.00%
.0
0.00%
112
101::.2:5.
249%
266%
2.83%
3.42%
3.42%
25
3:.25.
105908
4.32%
0.00
0.00.
00%'
46250
1.02%
0.00%/
466.08
0276%
0.00%/
0.O0/6
.
0.00%
449.17
476.58
516.25
524.42
-3.63%
6.10%
8.32%..
1.58% !
4023
LVEGAS
!.VEGAS
1991
421.8B
1992
L'VEGAS 1993
LVEGAS 1994
!.VEGAS
1995
420.3
441.3
491.5
529.1
LEGAS
1996
573.0
11868
1J.:'
176447
637.52
0.00%
525.0o
0.11%.
L.VEGAS 1997
LVEGAS 1998
6224
640.6
10321
10977
169315
198636
650.20
647.42
1.99%
.0.43.
53200
539.00
1.33%
1.32%
LVEGAS
1999
LVEGAS200
695.7
76
6234
5092
209613
215047
661.78
00
2.22%
0.00%
549.50
0.00
1.95%
0.00%/
1900
1989
450.1
468.9
2339
2820
122589
1242
126699
51
:
4
15
1000
127322
127701
100i0
0.00%
.00%
0.00%
0.00
0.00
0.00
0.00%
375.08
41242
0.00%*
9.95%
45435
0.00%
0.00%
434.00
456.75
5.23%
5.24%
473.68
4.25%
470.75
3.07%
4.37%
466.67
.87%
1.43%
0.00%
4z42
238%..,
9,{0
4-'
5301
147224
.44b
&PZ-
152525 '.'
155890
.000
3365
3561
7513
...9483
9
,.w~~~~~~~~~~~~~~~~~~53
.o~
MEMPHI
MEMP-i
28 HEMPH
1990
2MEMHI
1991
MEMPH-!! 1992
.6MPHI
MEMPHI
461.2
478
MEMPI
1995
LMMlvPHI 1996
530.4
543.3
MEMPHI
5.0EMPH!
1999
MEMPHI
300
556.6
5679
583.7
599.4
1988
1989
843.3
8726
1990
1991
1992
1993
1994
1995
1996
1997
1998
8828
858.9
849.5
878.2
903.3
923.8
933.2
953.7
969.7
MEMPHI
MAvII
MIAMI
MIAMI
MIAMI
MIAM
MIAMI
MIAMI
MIAMv
MIAMI
MAMI
1997
1998
MIAMI
MIAMI
MIAM
1999
2000
MILWAU
MI!WAU
1988
1999
-
36 MILWAU 1990
MI.WAU
1991
WVLWAU
MI!.WAU
MIWAUI
LAL
981.6
1003.8
......*i~41
&
"4..
'-"f*
!
.
M961%"-,1856
'...:194/.-!!.3567
1993
765.7
2000 1994
3784
0011
1995
MILWAU 1096
MII..WAU 1997
,LWAU
1998
811.0
819.2
8406
MILWAU
MILWAU
855.1
875.0
133745
2514
5092
136230
138744
.00
.
0
0.00
'-D41
l
00
0
.00
":'*i1:'
.:
8786
9997
t.$
---49$.........
.. .
39--
4476
::4%"
:,
.
2973
2240
230812
236015
238768
53511
54527
238846
242143
245116
556.74
567.23
'
!
f0l00
.'[$.
/*
i
49233
-ir"
1$t
--.-..
"".:$~-'"
4.98%
~p1-----.....gs..... ..... ss
2.68%
9.75%
6.64%
6.23%
-1.00%
f
'<if'"
.... 91
$S9
2.37%
1.0
24%
378
00%
.
......
~~-im
0#
.al
.*W
*0
4*--
-- 9*
-n-''--<st
$M
9*-.
4$I
469.42
.4
298%
269%.
262%
3.49%
.750464
~.~ ~ .5.~
~.4
.......
~~~~~~~~~~~
~.
5~91,~~~~~
226336
1102559
2753
78
3297
46270
..
,
5.,.,~~~~~~~44.0
.54 485.332 0.83.
4$'475.15
487.60
194*
m
2.00%.
425.67
203
223350.
'AA
4I%
4
67200
0.00
s'$9*.--459
'N/¶.
1kt
':
1.12%A
1.77%
2986
i]{~{~iiii'~'
'-' '~ j.':~:i.~
0.:
0.00%
.
0.00.,
0.00% .
64292
65397
211250
41
49:
.5;>_
:-!'.
=~.::
354843
356105
~,216290
mo~
*0
'
22
6145
--38%
M%
$41
4At
4592
5592
~
7370
249
49300
510.23
524.94
54628
57622
593.03
#1/
516.83
522.33
571.08
699.09
646.92
635.25
637.58
644.58
647.50
"-$$-
-'
A
328414
98%
323279
4,14'
.336076
329309
334540
..
341910 "...$04...6194
344659
624.55
349251
-*41'-'635.46
4513
2547
--t435-'
501.46
000
.oo
"
4:
235%
3.40%/
288%
4.08%
5.46%
2925'.
3.19%
206%
1.75%
3538
5040
49--.'
'
'
0
481.66
304635
1402
5782
2865
2797
3233
-"5231
~:
$94.-.
-crif4-..
tA
344~946*
.t*GS-'-----
o
.~
.N
457.92
0
i
135339 '49439
:
!---t;
0.00
.
'
30178
1594
'891
'-"1:.
--
755.6
7534
7527
166964
379
621
.!i-'""4fl
.0000922
859451
2367
710.6
737.7
1992
1999
20001
.-.-....
4637
486.7
5029
1993
1994
0
.'4l
W$9
9502
'
-
-e*
JC /
9'- "
0.00%.bI
2.00%
329.8
3588
*4A
!."'"
0.00%
198
1989
-'419--
.94$
"I*
I*
-N---
733.72
775,49
'.*-..983.28
.
-z8;96
~
3.22%
-t4$$9----..'---4:.
!
i
746.15
776.45
950.80
c~
$
4
-230%
-1.02% .:!.
-1.19%
1.03%
1.46%
276%
3.60%
4.06%
700.92
--
qr5
,rina
RENT
4!
4.47%
z87%
1.24%,.
0.19
0.19%
720.24
!iPq>
GOWT
RENT
1990
27 LVEGAS
29
.
1578842
1501874
.8523
.2
.......
30~~~~~~~~~~~'.
1575912 ::~:..p:::::
~$~~
293
02
3476
''**--
-'
628.89
657.00
.4:":
00
1556584
156509 .•
1570127
1573036
K' -.469
1134.8
1146.4
1132.4
100999
.
5038
GOV'T
RENT
506.33
-03%
213%'..
1.17%.
512.50
242%
5542
6.52%
284%
204%
500.50
4.~
4.74%
1.24%
1.90%
557.08
574.00
570.50
210/.
1.89/
0.00:.:
595.58
609.50
200
41
.49$#':
.....
""*1l."
4%
-. *1
.
S
!
2
-.61%
4.40%
2%.)5'/.
o.0*/.
The Correlation Between Market Fundamentals and Apartment REIT Performance
71
Appendix 1
Market Data -Employment, Stock, Rent, Excess Demand
I.':."<....<.::.
YearP
MSA
,
31
MNEA
MINNEA
INNEA
1988
1989
1990
1320.7
1355.5
1385.4
8IZNRA
1991
13824
MINNEA
vIIINEA
,IvNEA
LINNEA
MINNEA
1992
1993
1994
1995
1996
1997
)INNEA
MIs^E
MINNEA
MINNEA
'
,'
P ERMITS
'G:v.
s.tf.
6746
5039
385
iil.'=
484.4
496.7
503.6
4957
508.2
531.5
557.4
5903
603.8
6210
6459
661.9
678.6
1988
1989
1990
1991
1992
4139.3
4155.1
4138.6
39420 :
1994
1995
1996
1997
1998
1999
2000
3798.7
3833.6
3845.1
'
2159
2633
WkS:
2718
3809
308
M
19983~
4851
5335
:
:
0
,
A
.
4:!
i
~~~
···5 "
37972
NYORK
NYORK
1993..~:....
1993
3765.9
3765.9..':ti.ii
~g~4<,
..
NYORK
NYORK
,YORK
NYORK
WYORK
-WORK
NYORK
OAKLAN
1988
OAKLAN
1989
34 OAKLAN 1990
OAKLAN 1991
,OAKLAN
1992
OAKLAN
1993
OAKLAN 1994
A LAN 1995
OAKLAN
1996
OAKLAN
1997
OAKLA
1998
OAKLAN 1999
OAKLAN 2000
OKLA'O
OKLAHO
35 OKL^AO
OKLAHO
OKLAHO
OKLAHO
:
4013.7
4129.1
42128 I.'I.
823.3
854.2
86618
8848
871.1
873.1
874.3
890.4
907.8
1988
1989
1990
1991
1992
405.2
419.7
4267
4318
433.4
1993
445.5
4487
4903
4924
2223
277
1329
1011
1064
826
1202
46A
,
'
...
.
.*
!
%."8
"--'%
l
*&
0
0
0
0.00
.00
000
4%
52751
531.76
546.35
000
1
152176
154836
2155686
216526 :
2171472
2175106
50.08
537.00
55557
555
57342
'
4
NREI :.
RENT
Calculaed
464.92
486.50
4.64%
1.85%
487,67
0'24
235%
1.55%
160/
1.%
511.58
533.75
540.17
5.17
4.80
4.33%
L2(P/.
1
265%
3.56%1
3.51%
287%
3.86%
5.85%
568.75
59298
614.25
655.08
679.58
0.00
5.29%
4.10/%
3.74%
6.65%.
3.74%
0.00/%;
0.00%
.00
00%
0.90%
0.0o
o%
O %
0.005.
0.00%
5.17%
0.81%
274%
0.00%
396.67
407.17
41242
427.00
4413.33
487.08
509.83
520.33
515.08
53258
53258
0.00
Z65%
1.29%
3.54,A
3.83% .
9.87%.....
4.67%.
206/, :
-1.01% ::'
3.40%/r..
0,00% ::
0.00/.
000
,
ooT/
~~o
o.W
~
138837
501.56
5.69%
3.46%,
,0.,
0.00
0.00
2378242
58841
UI
'603.05
2182729
2186632 !:
2191177
2199664
2208317
2228659
2230154
619.12
603662
65.40
680.89
703.03
733.38
.
315098
322
' "*9
.......
1011
-'.
125
566
34
6
224
129146
123212
97
129740
129752
28
129976
435
650
857
.130004
130439
131089
11941
8745
11774
7605
.
.
."
1
:..:.
...
1150.9
.
1127.3
494W...
11161
.,....
1119.3
'2
11432
11739
IflM1206~6
ORANGE &
1997
1278.7
i'
13304
-*49
'
"
13750
.
-"
<'.t
'
-...
611.95
6400
.
663..2
67942
697.67
710.82
721.43
740.53
221%
261%
250
0.00
249%
266%
283%
3.42/.
3.42%
3.25%
4.32%
0.00
0.00
0.00
4.71%.
35
2.00
0.00
0.00
0.00
709.33
710.50
737.92
73267
739.67
759.50
790.42
926.92
"'*
1801
131946
2180
983
1218
133747 o-4$14'
135927
136910
.t::t::'/-.::
2968
2247
1903
4882
2245
1532749
Il41494
'j 14*$~
1549099
1552067
1554314
.
1556217 .
:-'"
1561099
3197
4055
1563344
1566541
2419
4560
5671
1570596 f.-'
1573015
S
1577575
" 4
*9A
$
:
MI*
.
2
*
.. :
w
.is."[."o "
.
:iI
.::
"'
0.00%
0.00...
o
'.
.
'
ii'
-'
.
.a
,
2.00%
i~i;
Y
2.80
: '.
:
00%
$.
O.o%
A
0.0%.':
0.0%
: :5 ': ..
o0.0%o.
0.00%
¢i*-i;m
ii
.16%.,.
3.86%.'.
Z69%~~~~~~~~~~23,,
739.67
.0.91% 4
i
237%
269%
1.88%
1.49%.
265%
268
4.07%
17.27.%
6.07%
1020.83
1213%
1059.33
1107.17
0.00 o
3.77%
4.52%
.00
0.00%
0.00
00
0.0.000
0.00%
00%
2001%
2 00%
*
:'
!
,
.!..:tl
9A9
"
4
~
*
f$
.
.
.
*
249
0
000
2.00
.':0
0.00
0.00%
0.00%
0.00
200
20
08
200%
0.00
0.00% :
0.0%2005'
0.0('
'l
0o.
00 .
000
o.
o.
200
.00
0.00%1
0.0/.
o.00oo%
o.00
Oo%
0.00
o.oo
0.00
oo00%
o.WA
o.00o%
756.21
:i
296%
7.83%
7.02%
7.02%
00%
.........
-0.71%
84704
906.46
970.11
2.
*
9.67,
785.51
0
000
000
.....
ii0!igiai~~¢'~~~~~i/~ ...!:~.
V
3136 "AW~l~i
573~~~~~.42
321%0.oo M
,
1105.7
1157.4
1998
1999
2000
133806
.":::
135903
136357
136586
137102
13837
141294
146952
i .
I
332997
336631
337989
1990
ORANGE
ORANGE
ORANGE
32313
49931
507.07
5519
51.
19
52886
4$
547.69
.
l%.0 56.903024
662
t~345
i"'3923
583.15
605.67
s
641,13
330464
1988
1989
1991
1992
1993
1994
1995
1990
298504
305321
308345
312268
317119
487.86
i!m
3034
1958
2054
ORANGE
ORANGE
ORANGE
ORANGE
ORANGE
ORANGE
ORANGE
ORANGE
290994
293153
978
2957.86
2533
486.3
495.7
5,08.1
25.3
539.1
...
.';.
467.19
NREI
RENT
Gic..
1992
433~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.00,,
'.
9
71
GOV'T
RENT
Gie
GiJfdih
.
Caculatd
·
3224
325022
326351
32762
328426
329262
OKLAHO
1994
OKLAHO
195
OKLAO-O 1996
OKLAHO
1997
OKLAHO
1998
OKLAIO
1999
OKIA4HO 2000o
26 ORANGE
4530
9295
9576
6210
3634
364
3136
'..
:
9363
964.4
995.7
1024.4
2970
1117
9980
454
229
516
1735
2447
5668
3096
2129
2660
1923
3903
:
4545
.
M,
8467
:-.~8653
:'I
10342
,
11495
,
14514
2914.7
*:;!ii'1 GOV'T
4f~Clfl RENT
280899
1671
1397.4
14344
4R1
1483.1 *~4
15328
1570.8
15968
1998
1643.0
MIC~~~~~~~~~~~~~NI4RNE~~A
I 1643.~~~~~~~~0
1999
1684.0
.
2000
1727.8 ii:.'..:
1988
1989
1990
1991
1992
1993
4ASJVI
1994
NASH-VI 1995
NASH-VI 1996
NASHVI 1997
NASHVI 1998
NASHVI 1999
NASHVI 2000
STOCK
Cl.ed
:
.'.'.'
47900
253%
.
479.oo40
2859ii8
3385ii'~~~~~~~~~~~~~~
289323
31~~~~~~
~
~
NASI-VI
NASHVI
32 NASVI
NASHVI
NASHVI
NASHVI
NYORK
NYORK
33 NYORK
NYORK
NYORC
{
Gien
#
:.-"*
"
4
M
730.33
79900
4.47%
748.42
248%
81271
82274
2432
825.91
82221
830:66
84281
866.04
897.20
933.64
287%
1.23%
0.19%
0.19/
765.33
746.67
744.92
733.25
75250
790.42
849.33
914.08
951.42
.
226%
-244/.
-0.23%
-1.57%
263
5.04%.
7.45%7.62%
4.08%
2005.
-0.45
1.03%
1.46%
276%
3.605'.
4.6%
The Correlation Between Market Fundamentals and Apartment REIT Performance
./'4""..."4ii
..
.
"
<
. .":"
. . :
4
.i
.:
72
Appendix 1
Market Data -Employment, Stock, Rent, Excess Demand
a
EMP
8
MSA
ORLAND
ORLAND
tfL4.X
G-e
1988
1989
5325
568.4
~57471
37
37 ORAN
ORLAND 1990
1990
605.5
*
ORLAND
1991
5993J
OR
AN 1991
599.3r~r
ORLAND 1992
6100
ORLAND
1993
635.1
1994
670.2
"
1995
703.2
ORLAD 7327
1996
1997
778.2
1998
822.6 .
OR.AIND
1999
80.7
ORLAND
2000
911.6
OXNARD
OXNARD
1988
1989
211.1
217.1
1990
2280 .. t
ORLAND
ORLAND
ORLAND
PERMITS
Gwen
*
...
0~WW
199 7327 ~3689
'""'""";l'!i
ORLAND
38OXNARD
OXNARI
OXNARD
.4*.'
7.".:.
i::
."
·18'"
19913
232.3
OXNARD 1991
1992
226.4
8220
7604
7471
4362
276
4121
400
5032
:,
13225
201741
:9538
214966
1479
1731
72107
1252
75090
76237
809
76997
OXNARD
1992
226~~~~~/~i.
1993
226.7 *'--4~ "':~..206
$: 3t:
.
4
~iii:'i~:
:,2D7
246
232
1994
OXNARD
OXNARD
°x~2376
1995
2368
1996
OXNARD
1997
240.1
OXNARD
OXNARD
OXNARD
1998
1999
2000
248,3
258.9
270,6
PHILAD
PHILAD
PHILA
PHILAD
PHILAD
1988
1999
1990
1991
1992
22414
2176,0
.21250
PHILAD
1993
21368
1386
434500
PHILAD
PHILAD
1994
1995
2151.8
21822
913
1311
435886
436799
PHILAD
PHILAD
1997
1998
2247.0
2303.5
2098
3374
2475
438110
440208
443582
PHILAD
PHILAD
1999
2000o
23493
2397.6
2506
2946
446057
448563
PHOENI
PHOEN!
1988
1969
6"51500
.':; t\
4038
2874
1959
1332
756
40 PHOEWI 1990
PHOENI
1991
PHOENI
1992
0PHOEN 1993
'
'
t::'e"
>¶
427579
432412
433744
....
3
.
1036.2
11006
2257
6501
299487
301744
.
1998
1429.5
PHONI
PHO
1999
2000
1497.3
1565.0
PITTSB
PITTSB
PITTSB
PI1TTSB
PITTSB
PITSB
1988
1989
1990
1991
19925
1993
P!?TTO
1994
PITTSB
1995
9655
990,7
1016.9
10147
1006,8 """'':"''L',:i-/3.
10208 - 44999'
10345
41M4~
105o08
:
PIVISB
1996
10530
PITTSB
PITTSB
1997
1998
1071.6
1004.4
P11B
PITTSB
1999
2000
109
11112
PORTIA
PORTLA
PORTLA
PORTIA
PORTIA
PORTIA
1988
1989
1990
1991
1992
1993
6438
681.8
713.8
723.2
7324
7543
PORTLA
1994
787.4
PORTIA
1995
824.5
PORTLA
PORTIA
1996
1997
867.2
904.3
PORTIA
PORTIA
PORTLA
1998
1999
2000
931.0
9376
9660
'.'.
*
1
.'.. :
4J$
.":':'
-'
:"
$49
'
.
"
$
-
"'
-9
0.00
0.00%*
0.00
.,:
0.oo
2.00
0.00O/°
':0
: · '~::-:i:'::
.':~:':':"~
:
0.00% : ::;:i:!:::':':
o.00
338395
9265
1i0981
349635
358900
1705
872
783
932 :
522
5720
276%
3.60/
4.06%
0.00
0
0.00
4.43%
3.98%
274%
653.33
670.83
678.42
651.58
.
'
210%&W
245%
256%
737.33
771.17
814.92
0.16%
4.59%
5.67%`4
261%
3.13%,
868.00
0.00
6.51%
o.o/.
376.25
:
369.83
-1.71%
2.00%
2.00%
395.50
389.67
6.94%
-1.47%t
412.67
461.42
5.39%..
1236%
517.42
2 ""90%
349%
8.98%°/,,*$0~-..
.00%:
00%
0..
568.17
6.10%.`
597,65
0.00
1.48%
O.0.'.
568.75
0.00
0.10%/
2.00%.
364.11
37500
0v2.
2%
9
56292
567.00oo 0.73%
290%
60958
7.51%
3.43%
265%
621.25
595.08
1.91%
-5.82%
273%
604.50
11.86%
273%
53550
50283
635.25
.%
911
258166
440.64
1.91%
667.92
5.14%
259077
260709
445.94
46213
1.20%'
3.63%
683.67
686.58
236%
0.43%-*
1.85%
.00%
693.58
0.00
1.02%
0.00%
5.63%
6.71%
4.93%/
261%
513.33
5519.75
507.50
50283
491.17
1.25%
.236%.
.092%
-232/.
535.45
551.92
566.71
591.92
4.66%
524.42
6.77%
3.08/.
543.08
3.56%
268%
4.45%
541.33
554.17
-0.32%
237%"
613.43
627.21
63696
3,63%
225%
1.55%
575.17
572.50
.00
3.79%
-0.81%
3358
9220
5692
2331
196
3092
179595
leg15
194507
195838
196944
5814
7081
7055
8387
200o36
205850
212931
219986
6575
4482
3614
228373
234948
239430
.
472.66
'_:::.:'.,,P4-:::
.::
000
o
-.-...
:44W
·
$3
%"'
$
417.48
441.00
470.58
493.77
511.59
:
502.83 8.9:.
0.00%::
4.87%
0.00%/
-0.20%
641
262266
264083
..
$
0.00
1632
1557
1817
1336
"
. o
....
5.01%
37 .
249561
385.89
$
.399.14
2504935.
251015 t:
(0W
409.73
256743 " 4499%.~j~iib~l~~
420.92
257525
40..
782
,
28%
1.13%
-3,96%
5.99
60032
615.68
'
:
i:
: '.
684.25
:208%/.
:
4:.
4/
2.00
% ':
0.
721.00
736.17
.588.93
.
.00
1.55%
0.00
.000
.* o
-
0.00%
1.2%
1.45%
0.00
0.00
247906
26228
.00
6585
574.04
. 00
::
0.00
":'..:
558.68
:
8953 . 3172,.4.8."--._.
308295
o o
103
13
1728
"
:I 56272
11014
327381
0
5.10
~~~8953
300295
000o
11240
1.03%
0.00
'...".w
1.46%
0
-
0.00%
0.00%?
O.W
0.00%1
0.00
631.72
651.51
-
0.00
:.I 0.00
W
019%/
.
:..' ..
*4*
PHOENI
.
0.19%
535.48
550.15
296876
297946
W
ZWA
4
'
78989
493,16
1070
1541
1287
0.0
-3-...
'
1.23%
7c*$~
795.96
007.60':y
829.87
859.72
894.64
10149
10101
13572
11953
1995
4.47%
2 87 1/
'.s?.:'
'76::::::::1":~::':
-0.45%
78787
-0.45%
29435
1997
P808W!
561.75
3.61%.
-ZS*
265`...
258%/.
3.0% .
-0.o
.'
5.14%
5.47%
4.08%
212%
o0.00`
788.37
"4$'79141
293121
1996
3.02%
o 0.00%
.(
757.00
1
2041
1995
1195.3
,,2 12L8.7
477.17
7.32%`
138%
iii..\e9:V
778i
IB76
'
6526
1714
PHONI
435.75
451.50
439.83
451.50
463.17
724.62
958.2
985.0
1994
PHONI
D"9;
NREI
RENT
Cl1ulated
476.58
501.08
528.50
550.08
0.00%
o
0
10007
PHOENI
PHOENI
42
"
'.°,
!!
0.00%
2.00%
0.00
56087
607.86
65235
67204
78259
78491
78859
7964.1
:
"
78013
368
782
976
2194.2
2227.1
000
787,87
77806
i
'[[?
PHIWAD1,,~
I 2193.2
~P81L.AD
293 1996
41
76791
OXNARD
0.00%/6
0.00%
0.00
.o
0.00%/
O.0
7
554
GOVT
NREI
RENT
RENT
Calculated Given
0
000
000
fr~
7695
10734
OXNARD
39
144357
la
11
159432
4P*'
163794.00
166170
170291
174591
179623
183312
191007
"
1147
230.1
GOVT
RENT
Gwen
STOCK
Clcued
:,
z
'
$1¶
:
:
"..
....
........
.
L4755
.:.:.:.
::
'.::::
*N-
.
.
....
*
-
*
a.
4*
00%
The Correlation Between Market Fundamentals and Apartment REIT Performance
73
i!
i
Appendix I
Market Data -Employment, Stock, Rent, Excess Demand
II
I.
YeaTZ
MSA
43
RALEIG
RALEIG
RALEIG
RAEG
RALEIG
1988
1989
1990
191
1992
1993
~L~,i~
7
GGG
425.7
447.8
464.9
47
481.7
503.
'
5469
572.8
RALEIG
RALEIG
1997
1998
6007
6353
RALEIG
RALEIG
1999
2000
659.4
6805 .
RIVERS
RIVERS
RIVERS
610.9
648.8
701.5
1991
RIVER
,1992
1993
1994
719.8
7268
730.5
728.2
RIVERS
RIVE
1998
1999
200.968
SACRAM
SACRAl
SACRA
1988
1989
1900
47
.
5021
523.9
549.4
SACRAM
SACRAMv
5629
581.1
2D.'
SALTLA
SALTLA
SALTLA
1988
198
1999
SALTLA
19912
SALTI.A
SALTLA
SALTLA
SALTLA
SALTLA
1993
1994
1995
1990
X
~~~600.2
615.4
639.4
~
..
676.3
448.2
465.1
486.5
514
63.4
55z42
546.00
.1%
4.90%
564.67
3.42%
598.93
0.00
1.81%
0.0%
581.00
0.00
205%
0.00
291308
535.09
5486
::M.
3252
RIVE2S1992
1960
752
7249601
307283
i
3243
309995
SALTLA
661.7
680.1
SALTLA
1999
71.X:~.*!.
714TLA
,DIEGO
SDIEG^
SDIEGo
SDIEGO
198
1989
1990
1991
884.5
924.7
194
649
310505
310699
314
312672
.
3107634.85
3190660.64
557
575
47
755
1234
2853
,2744
3318
21535
232092
237
233134
233889
235123
237976
2407000
152
116
285
112810
I=
199 131
113410
514.4567
113777
115533
117169
1.1
2391
2800
..
577.50
0.0
4.47%'
607
4.98%..
00.'
0.00/
51.83
0
0.00
601.57
678.36
671
,
.
0
.
0.00%
00%
0.00%/
1276%/
.4.61%
"
0.00%
0
...
SEATTLA 1989
SEATTL
1990
SEATTL
19918
SEATT
1038.2
1107.9
119.7
84.5
1
12939
21347963
J309,
6
32.2540
SEATT'L
SIEATT
SEATTL
SEATTL
1992
199
1994
1995
1137.3
1141.5
1148.8
1176.3
SEAT"1L
SEA1oL
SEATTL
SEATTL
SEATTL
1996
1997
1996 o
199
2000
1204.0
1265.1
1334.2
1377.6
1396.9
136
4299
3981
6703
7795
11814
10220
220
331012
335311
339292
344003
350706
358501
370315
380535
'::::..
. :::
:
::::..
./..:..:.
..
':i::.
..
:A:
30%
.
~
*I0'9$
. 4 1)
04.0
3.81:: 0.00
8
.
5.41%
5.55%
1..
506%DV
0.00'.'.
0.001%
364.58
397.25
0.00
0
0O0%
0.00%
418.25
448.00
0.00
434.40
46851
4829.0
0,005':
0.00%
7.85%
37
473.6
003.42
51292
9
5.73
6.28%
2095
0.39%'
0.00
558.25
3.575'6
-0.84%
-0.26%
65
690.67
7
1
16.3%
1 5
61.6.13
631.65
647.04
6
72
6%
244%
4.94%
.56%
757.17
804.42
69.17
893.67
765
6.24%/
8.05%
2825/
51800
552.53
8.00%
6.67
567.00
574.58
557.67
134%
94%
3.75%
298%
2
1
1.0%
555.33
557.67
.67
59267
-0.42%
278%
3
3.86%
5.32%
4.32.'
3.1%:
634.88
69242
718.08
7425
.0
6.995'%*...
928%.
S~:42
73.25
58515
59781
60855
625.44
6496
684/14
71369
74016
..
:
055
1.72%
/.
12.'8
-1.435'Y.j~:
609.50
6231'.
..
*87%..~,,::
13 02%.~
8.96%
5.29'.
7115
710.0
722.75
693.00
683.09
4.36%
~
~
030A
0
000
j
0.72%
~
524.42
585
557.08
588.00
617.75
308
322.58
58549
611.00
60721i
430196
433075
..
2.:1"'
0.00%
.1 00025
.'
399467
2878
6225
{
518.58
1Si"fii]
550.08
13656
7854
9~~$~
080
1084.5
1136.4
'
*~
146%
276%
3.60%.'
4.06%
484.79
1998
1999
i
59.7
61281
4:!
7.03,
587~~~~~!i;t'':--77i~
,1o~ 49,.4265
0.00
1
426276
17563 ..
427283
:
:-4711
2031
4.81%
287%
1 18%
234.,
526..
186
1309400.00
1017
368
2903
~i'~~i:~::
53317
507.50
4992
49875
510.42
48358
~
0
16
. ....
995.2
SOIEGO 2i*4-.WA
1034,5
1997
~
533.17
5.
287%
1.23%
0.19%
0.19%
-0.%5
4.40
*:.i4$:
~~~~~~~~AW..
559.00 4.47",
4:
95
1442
:..
3.84%
575.07
582.17
583.29
584.41
581.79
:
5967
~~3689120175
23964
6325
*
';~iiiiii
.....
~~~~~~~~~~~~~~~~~0
., . 000ii
s53.17. %
i..{.~
0
.00
4191~626.39
421100
52112
422701
424408
SDIEGO
SDIEGO
/ii
17
1348
2259
1521
300617.
10707
1868
ODIEGO
1996
$ATA
199
i:.
1?
94 ,0
1756
1636
7
6
1997
882710
1998
900.4
9688
0.00%
0.00%
9
S3LTLA
535.8
567.3
001.6
325~
0.0
7.55%
566.72
2850*0
0.
0.00
5024
4.~~4~:i
0.00%
/6
0.00%
132768
17488
374...ji8
142433
149290
4605
4168
221134
2889!p'.1.*.00..0.00%i523.83
2,,
SACRAM
154.0
'.
SACRAM
0
0.00
0.00
0.00
129442
1903
2416
*$
O0%
0.00%/
0.00%
-
"'Mm.......0
RENT
4720
4945
~~~1324
~9
~2395
8007
913.4
ODEO 1992
949.5
SDIEGO
1993
946.0
SAIEGO 19949560.96795
SDIE
1994
9509
SDIEGG
1995
965.0
48
.~!~
7708 .'pt4~.......
RIVERS
1995
796.6
827.7
$
SACRAM,193
1994
1995
SACRAM
1996
SACRAv
1997
SACRAMv 1998
SACRAM
1999
46
I~
~
'510:
RENT
3326
9922
7237
"
0.00
0.00
.. . .
rl., 1.
T
RENT
0
I'm:l::
117773
11871 .
119546
:io
6857
6315
"::
:
,IERS , 5s
78
RIVERS
RIVERS
RIVERS
114870
"'. A
a
GOf
RENT
~~~~~~~~~...'!..~ii:¥.~ii..:~ii'.
0.00%
49467
RLG194 53480.00
0.00%
5300
::::::::::;i~~~~~~~~
~~~~~~.~.....~..'*..:::.:
3946
125496
... '1~
1988
1989
'
STOCK
1198
1254
16490.00
99
775
107
99$!.
/
**'~*~~'.~
1990
RIVERS
1996
RIES 1997
PERMITS
--
1995
1996
44 RIVERS
45
:
RALE G
RALEIG
RIVERS
RIVERS
. A
- I
OV'T
EMP
~
.
o
:..
ii
...:! '
!
:::..
'"
:':'
:
'*:*
.~::
2
3675'
3.
0.'::::
The Correlation Between Market Fundamentals and Apartment REIT Performance
:
74
Appendix 1
Market Data -Employment, Stock, Rent, Excess Dermand
"
:¥
:....&.'.:
#
49
50
MSA
Y
EMP
Jv."': Gear
::
".'-. GOVT
O'. ..GOV T
SPRANC 19
918.9
3137
SFRANC
SFI9ANC
SFRANC
SFRANC
930.5
944.0
943.6
9196
3234
156
1296
1198
I
193
1176
1271
1848
2346
3497
2728
3553
1989
1990
1991
1992
STOCK
Cllated <'""'""~"'e~ :
PRMTS
Glven
K
.
327507
~74
332302
3358~747.19
~'*.K
334796
67.26
910.4
SFRAN4C
SPF.ANC
SFRANC
SF9.ANC
SFRAI4C
SFRANC
SFRANC
1994
1995
1996
1997
1999
1999
200
902.2
908.9
939.5
970.6
998.5
1033.3
10028
SJOSE
S$OSE
1988
1989
7925
810.0
2794
2311
209088
74201
SJOSE
1990
813.3
3223
21199
777.00
SJOSO
SJOSE
SJOSE
1091
1992
1993
814.8
7899
9"
795.0
2118
1301
1628
2146232
216740
:
218041 i
'v
49A~
'~$j$~
*~'*~*~~
~'"'"'"''~
:
"'"
~
:
1994 ~~~~~
795,6
SJS
94..7956...
SJOSE~~~
~~
:
754.83
755.42
751.33
0.84%1W
.69%.
0.08%
-0.54%
.
Ai1t.
. 44:.'
216%
291.018
0.13%
0.00 .
5.01%
437.26
447.75
457.61
468.74
479.24
485.28
498.32
3.46%
240%
220%
2.43%
2.4%
1.26%
269/"
499.33
520.33
557.67
547.75
5725.
582.17
0.00
7.54%
4.21%
7.17%
-1.78%
4.47%
1.73%/
0.00%
OD',
0
OE.DO~00 0.007.
000
0.00%
0.00
0.00
0.007.
o.o0.o
00
000
0.00
0.00%
OSO1e
o.o0.
0.0
0.00
0.00
0.00%
0.00.$6
0.00%/W
0OO
00.00
0.00%/
0.00%
0.007.
0.0
0.00
0.00
0.00
0.OO%
0.00%"'"J
0.00%
0.00.
0
000
,00
00%
0.00%
0.00%
0.00
0.0O
0.00
0.007.
0.00%
0.007.
389.6
390.2
39.8
STAMFO
STAMFO
1995
1996
400'3
4024
STAMFO
STAMFO
STAMPO
1998
1999
2000
427
427.9
43z iif
TAMPA
TAMPA
TAMPA
TAMPA
1988
1999
1990
1991
024,8
855.7
877.3
863.3
7481
4461
3296
27046102
TAMPA
TAMPA
TAMPA
TAMPA
TAMPA
TAMPA
TAMPA
TAMPA
TAMPA
1992
1993
859.2
8851
1291
27412
2132
275413
1994
1995
1996
1997
1998
1999
938.9
9825
I09
18
1102.2
1138.8
3740
4214
4674
6241
7286
9671
277545
281285
285499
290173
296414
303700
2000
1192.5
5II
5919
313371
TUCSON
TUCSON
1988
1989
248.0
250.0
1990
2518
1891
1992
1993
1994
1995
1996
1997
1998
1999
2800
28.5
220313
994
6W
92
223589
224583
2522
1267
145
2129
1738
2764
326
74
471
201
=
4:::.:.""
43
585
154
'
"'
.48
"
':.4''
~
..
3
.
".:{
'
??
.
4
.
I'
226199
227566
229051
231180
232918
234872
237002
.. '.'.
~
$::<
26802
27347
27548
27591
28176
4
g'w~~~~~~~~~~~~~~~O
28330
269
28897 ::
158
29166
.'
:
t
70,0
3.587%
237%
2.69%
43225
441,58
442.17
44217
464.33
'
'".'~
:.' ..
766.50
4.72%
251%
0.92%
0.69%
1.61%
1992
1993
1994
304.4
3103.
322.4
328.2
349.4
,
404.82
41500
41882
415.95
422.63
3975
2185
.- .
$
1
439
554
1942
482
471
,o
30
74
840
1954
63
125
,
:'1028
1500
682
000
29316
29498
29937
:
261110
N=25
S22
*
47
48381
:.:".."...
:
:
~
4~*9~
101007
101.8
101960
-2
1000
102864
102904
104858
107199
1073
109048
110076
111576
428.46
448.00
o $,o,
0.00%
4.56%
43225
431,67
.0.13%
291%
45.25
.1.49%
2.12%
427.00
0.40%
2.77%
441.00
3.28%
50099
513.51
525.31
3
558.68
572.51
3.53%
2 52%/
2.30%
4
481.25
490.58
0.24%
1.94%
2.47%
246%
537.25
556.00
6.35%
2.58%
591.23
3,27%
0.00
0,007/
0.00%o.
0.00
0.007
0.00%
0.00
0.:00
W/
0
0.o
0.00
.
!*~}~:..
:
'
'**
'
$'4".3
0.00
000
.00
487.66
511.07
490.38
500.18
0.00
'
..
.
'
~
.*..~~~~
, ':.
.
......
.. '
·
/
.
~
$I~
.
4
'
.::.
.
'567
'
%./16
1
.....
.
**
."
- :. .:
.
.%
:&
505.17
::..:i".:.:./........
~~~~~~~~~~~~~~~~~~~~~~~~~~.
....
.
0.00%
0.00
0.00/6
..........
:W
*
':
{
:;%
**
10.25%
:
/
1.85%
/6
13.90%
10.55%
14.49%/,
5.27%
5.78%6
0.00oo6
14.0%
1296%
10.38%
6.83%
4.49%
0.00%
.
~2130
.2341
898.33
1023.17
1131.0B
1295.00
1363.25
144200
0.90
945.00
1067.50
1178.33
1258.83
1315.42
O.00
STAMFO
STAMPO
STAMFO
30o
1.89%
1.49%
265%
6.08%
7.83%
7.01%
7.02%
\41
::::.
*P1i
828.33
426.2
430.7
49.6
40.4
269.8
287.5
6.337,
1.89',,
1988
1989
1990
1991
TUCSON
TUCSON
TUCSON
TUCSON
TUCSON
TUCSON
TUCSON
TUCSON
TUCSON
TUCSON
88200
.\I8j
...,.....
1.49%
265%
6.08%
7.83%
7.01%
7.02%
STAMFO
STAMFO
52 STAMFO
STAMO
54 TUCSON
2.697.
"
4S'
874.77
897.92
95247
1027.00
1099.12
1176.31
..
.
265%
1.
6.52%
1.21%
8610~0
.2...a
:
84.79
.:.:.:.. 8233
845.95
1:" 9
38
*
.
749.58
769.42
819.58
829.50
21966i9 ~:f'e:..i''~i;:
4t..~...
4127
931.54
996.88
106.88
4.72,.
3.58.
2.37%/
:'
221486
222699
226241
230294
233910
237467
1143.5
1176.9
1193.5
1172.2
1166.2
1176.3
1207.9
12395
1255.8
1285.3
130516
1311.2
13304
STAMFO 1997
863.87
RENT
Cal'ulated
1213
3542
4053
31
3557
.
~
814.39
NREI
RENT
Ghien
1817
1988
1989
1990
1991
1992
1993
SLOU
1994
1995
1996
1997
19,i
91954
1999
200
SLOUWS
SI.OUIS
S.OWS
SL.OWIS
sI.OIJIs
SLOWJIS
SLOUIS
781.7
NREI
RENT
Calculd
...
811.4
8660
906.2 .':'
954.2
961,9
9825
SLOUIS
SL.OUIS
SLOuIS
SLOUIS
SLOUIS
..
335889
3305~793.39
338336
340184
342530
346027
348755
1995
1996
1997
1998
1999
2000.
53
672.98
704.72
729.92
SFRAN4C 1993
SJOSE
SJOSO
SJOSE
sJOSE
OJOSE
SJOSE
51
RENT
Given
0.007.6
0.00
0.00ooo 0.00
0.007.
0.00
0.00/.
0.00
0.00
4.80%
-4.05%
0.00
20O%
0.00
0.00",.
0.00
0.00%/
0.00/
0.00%
0.00'.
o.0D/"
0.00%
0.00%
0.007%
.
.......
":.'i'
The Correlation Between Market Fundamentals and Apartment REIT Performance
'
- ..
t::!
o
75
Appendix 1
Market Data -Employment, Stock, Rent, Excess Demand
~~%A
.~~~~~~~
.:~rqGOWT
-.' .. ......
MSA
Year
Giv
Gin..:
G{,m-
STOCK
C: ~taated
WASraN
WASHIN
1988
1989
2231.2
2313.0
11668
12821
135732
WASIN
1990
2348
WASI11[N
WASHIN
WASHIN'
WASHIN
1999
1992
1993
1994
2304.2
22798 :::m
WASI-IIN
WASHIN
WASHIN
WASHIN
WASHIN
WASHIN
1995
1996
1997
1998
1999
2000
24027
24070
2465.6
2520.5
2599.5
2685.5
WBEACH
WBEACH
56 WBEACH
WBEACH
W/BEACH
W/BEACH
W/BEACH
WBEACH
WBEACH
1988
1989
1990
1991
1992
1993
1994
1995
1996
335.8
350.0
3591
$
3557
353.7
.'.~~'.i.*c~6%
3620
3805
3928 :2872
410.6
:
428.2
V/BEACH
1997
6563
7501
4196
2363
1876
1861
2794
106481
108744
1106280
112481
115541
118413
.120056
4528
465.1
*j4*
3:2346
3580
122850 'o
1269
;zY
3567
1287
EMP
#
55
WBEACH 1998
V/BEACH
1999
V/BEACH
WILMIN
WILMIN
57 WILMN
200
1988
1989
1990
PERMITS
57
4"
'"
$ ......
236
23501
i..5i ZW&i.i .
NON57
NONs7
NCN57
NONS7
6159
7824
7189
8795
9322
8973
172161
1783
186144
193333
202128
211450
99
1643
259.2
2727
2764
ILMN ::::::::::::::
1991
2697
26349
*4
267.7
273.4 :::::::
z..
2816
4P
284.5 :.:,
297.5
.IWA
308.2
317.7 :.
'
325.0 i
'.
WIMN 1992
[263.4
WILMN
1982
WILMIN 1993
VA1Av88N 1994
WILMIN 1995
WILMIN 1996
WILMIN 1997
WILMIN 1998
WILMIN
1999
WILMIN41W
20o
157126
159928
162844
166827
~
~3060
1265
960
589
176
431
208
87
152
348
894
355
791
NONS7
NON57
NON57
N0N57
NONS7
N0N57
WOWS7
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
49227.9
146340
48836.8
.
122393
48739.0
89324
503494
......
93539
98166
523175 ..
':...
548309 :::::::::::137289
4i*P8~ ..'
55337.1
144818
567721
15494
58231.7
154393
164503
526
4%.
602154
16666137
604294
*W..
136792
NAT/IS
1999
1085177
NAT/US
1990
108104.3
NATUiS
NATUiS
1991
1992
100148,3
109108.7
NATLNS 1993
NAT/iS
1994
NATUiS 1995
NAT/iS
1996
NATUiS 1997
NAT/S
1998
NAT7S
1999
NATUS 2000
.
YAR
57MSA
57MSA
57MSA
57MSA
57MSA
S7MSA
57MOA
S7MSA
57MSA
57MSA
57MSA
57MSA
1989
1990
1991
1992
1993
1994
...
'
'
9
94784
~
406761
S,*t
52166
5242
527
52858
53066
53153
53305
52653
54547
54902
15360424
IM74
15628157 !
15718491 .:'
15812020
15910186
16047475
1
16821
212514
3618952
303176
33831466
394200
34134642
34469923
34826067
35204807
3562465
36846333
S BMP
%.
D EMP
S PERMITS
S STOCK
C.alculated
59289,8
60267.5
594093
587593
594622
60767.1
Clculated
Calculated
Calculted
17155414
17415835
17610284
17716217
17806932
17921280
260421
v
.a 194449
"
105933
.
S>..47. , v':
90715
i.4
:,
114348
. Wi
165887
1995
62613.9
:*' "
1996
1997
1998
1999
2000
63907.6
85724
67750 6
695676
71401,3
's
,>
.::I:.
a
*
y
fi%
*
. 1":
4
:
":..a
190463
18087167
201196
224347
260155
261845
257408
18277630
1847826
18703173
18963328
19225173
4.41%
695.33
1.62%
68.990
699.63
703.61
716.00
297%
141%
0.57%
1.76%
70350
676.67
706.42
713.42
1.17%j
-3.81%
4.40%
0.99%
204%H
230%
0.30%
730.33
760.67
774.08
4.15%
1.76%
249%
3.1%
3.61%
813.17
859.25
0.00
5.05%0/
5.67%.
0.O
0
747.39
749.60
768.28
79220
21.35
5
I*9
.
.
~
~
&i#
$91
%
."
778.68
1.77%/
250%
z28/.
4.08%
5.46%
292%
3.19%
4.43%
3.98%
Z74%
1.55%
1.2r/8
1.45%
208/
2o~.H
245%
256%
260%
3.13%
4.22%.
354
251%
231%
.
246%
247
266%
290%/
3.4
3.14%
3.61%
0.00
' .
j
...
3.56%
294%
0.DD0%
...
*Wr'..zf
4
0
.'6...
0.00
o!.
0.00
0.00%
0,00
0.00'H
0.00
0.00%: . :::.'At...-:'
0.00 0.9O% .
.N
4*
0.00
0.00%:<...:
&$..
aoo.
0.oo/
.:
"
.:.:.:.......
0
Ai
t
0.08
0.00
0.00%
0.00
0o.%
.
.
54250
551.83
555.33
564.08
58192
:a...611.33
647.50
6
71225
5.3
793.33
0.00
,
12%
0.63%
1.58I
....
:':.:
i
..
:
.
2.2%
.;::.i!4i::.:
4.70'.
5.924
0
4.27%
6.68%
4.41%
0.00,.
4q
o
t
4
Ap
i7W
54250
422%
551.83
46283
74
3254%
5%
231%
246%
555.33
564.08
523.22
538.40
555.84
57328
59395
.:::
0.90
44700
06
1~
3A
594.42
611.92
497.38
509.66
52322
58.40
3
555894
573.20
593.95
1!4
4
206%
462.83
474.45
wFF
~ 4*
4
1.75%
1.12%/
4543
8
JI
756.64
7615
siW'497.38
*:.
~
~
501.67
51217
209%
503.42 :1.71%.
494.08
.1.85% .$$*$'4R%::.::
:
#.
518.00
4.84%
**k'
541.92
4.62%'H
54109
0.22%
565.83
4.19%
..
574.00
1.44%
....
.....
.
236%
4891
14%
r1
684.25
670.00
48543
.6.0:.
1117797
335281
356144
,378748
Ckulated
428.91
16501634
1590
117951.0
1206797
1239557
*i*
126967'3 '424658
128783.0 ,416868
131830.7
RENT
Given
.447.00
~.$
195257
184254
316842
RENT
Calculted
50169
526.00
546.91
561.90
570.62
577.94
58630
598.50
613.14
620.83
645.21
665.43
•
32515838
U53ZM2.44*t"
23239441
33434698
#NY
4*4
*6%
RENT
Give.
573.48
58700
60752
62503
4
65055
$449~.686.08
70610
72862
7.4$*
43.63
50617
16347241
RENT
j
~.
431"...:¢1
8
',73 %
85
NREI
641.69
$*r'
IM
~02
2916
3983
5334
%A
NEI
GOVT
1t*~p%
47%
266%
290%
3.24%
3.14%
3.61%
1.72% Yflk*M14I.~
34
0.63%
1.58%Ar/4*
583.82
352%:..
611.33
4.70%
5.2
647.50
683.08
71225
759.83
793.33
00
5.50%.
4.27%
6.68%.
4.41%
.0 %
The Correlation Between Market Fundamentals and Apartment REIT Performance
'tir~'
*
:f:'fl~'' :::
:::i:
W%
Ams
".
-69
.
*M.o
,
76
Appendix 2
Apartment Growth, Rental Revenue Growth, NOT Growth, FFO Growth
'li"
a8
1;IT
1 A.o.iab.d Estes R LyCopo.aibo
2
AEC
ApotmsntInvos'ent &
Mgst. Co.
AIV
Ym
1996
1997
1998
1999
200O
1996
1997
1999
1999
2000.
3 A.1i P, id.ni Properties Trust
AhL
1996
1997
1999
1999
4 Arth.ton. CommunitiesTrust
ASN
5 AalonBay Comuonities I.
AVB
6 OREProp-sti., In
BRE
7 Camden ?foprr7Trust
CPT
8 Equity RidniA Propdties Trust
EQR
1996
1997
1999
1999
2000
1996
1997
1998
1999
2000
1996
1997
1999
1999
2000
1996
1997
1999
1999
20D0
1996
1997
1998
1999
9 E.exProeosT-t4tn.
ESS
Gble R.esideil Trust
GHP
1996
1997
1998
1999
1'-IME
1996
1997
1998
1999
20D0
1996
1997
11
-o
Iropesties of NewYork, In.
e
12 Mid-Amsesico
Apattrnent Commuities, lonc
MAA
13 Post opsstts, I.
PPS
14 RobetstR
RPI
15 Sit
tlyIsrstrs, lt
Proprties Ic
SMT
16 ChodesF. SmithRsidetiulRelty
SRW
17 Corr.stose R.esiyIom Tust
TCR
18 Tow-andCottoyTrut,Th
TCT
19 UniedDomin io
eoltyTrusot,In
DR
2000
1996
1997
1998
1999
1999
2000
1996
1997
1996
1999
2090
1996
!997
1998
1999
2000
1996
1997
1998
1999
2099
1996
1997
1998
1999
2000
1996
1997
1998
1999
2000
1996
1997
1998
1999
2000
1996
1997
1999
1999
20O0
%A
%A
%A
Ren RH' Rental NO!
#AM~-
Sotr1Uk
16.73%
181..6%
20.61%
0.0/0,
5.05%
47.99%
43.79%.
259.49%
19.47%.
10.52%/
31.05%
35.69%
16.06%
14.80%
13.915t
4.48%
13.21%A
22.99%
.7,3YA
-9,97°4
33.68A
52.05%
17.02%A
-2.41%A
3.75"4
8.835%
30.90%
14.19%
7.20%
14.10%
&,55%
3.79%A
11.32%
0.01%
-6.25%
5332%
54.77%h
14.64%
2.66%
-2.59%
.50.82%
77.90%A
15.84%
21.49'%
19.38%
26.21%
14.77%
37.37%
150.
.4.622%
26.29%
94.22%
76`66%/
41.44%
15.46%
5.82%
58.12/
9.36%.
3.32%
.1.74%
63.04%
12.46%
9.901,
21.33
1.80%/
#DRV/0(
-171e0
37.68%
5.03%
9.86%
19.87%
11.55%
11.64%.
13.27%
0.4Y.
23.31%
18.815%
27.50%
12.23%
7.55%
400.82%
39.65%
21.82%,
7.31%
.13.7r/.
0.01
0.00%
8.38%
7.52
-4.07%
21.201
5.81%
10.34%
13.1%,
-3.42%
~
%A
Ne
Mas%
%A
%A
Ne Is.
FF0
IwOnlt
CaP
Miis CaP
a-Oaio
- ais
aerUaj
Uni.
o-e Ui
a-Uh
C.. Ito
223%
1263 5
0.043
S*94
6.19%
7.93%
-..
08
-9235% 5
1.18
0.045
3.21%
1.25%
-2.3P/0
7.49%
.11.,295
4.84
-29.89%
5
0.83
0.039
-11.41%
096%
8&10/
1.12 $ 0.038
.3,43.
7.99%
6.24%
-21.0.,
35.32 5
975,0
-3,730%
.4.899~
.19.49% .90.30
1020
022
o 0.035
.79
-5.64%A
.34.40, 5
0.35
0.0281
28.41%
5.70%
-9.37%
-5,96%
60.41%
5327% 5
3334%
29.11%
0.53
0.049
75.46%
.33250,
.44.3%,
-37.36% 5
0.33 5
0.025
-49.10,0
-45.6494
16.34%
5.11% 5
0.35 5
0.029
1129%1
4.75%~
38.12,
78.101/o
6`54
23,'3%
1084% ;
09 1
0.036
3220
.2132%
-10.87%
-15.1 , 5
0,09 5
0.037
.29C0
6.74%
.20.52%
-169.4
-1121,
17.69% 5
.2.907,0
1.04
09.034
.8.14,
6.51%
7.34%
5.0,0
1,10
0.034
-1.31%
9.54%
11.3%
4.0,1% 51.74%
.7.149
0.34,0
5
1.66 5
0.028
.16.42%
-5.14%
.631%
29.060k
-13.81%
-13.799
2.16
e.29
-.04,0 -7260k
4.41%
-1729
-17.39
-20.45,
2.20
0.049
0
.12.85
6.71°.
1.08 5
0,054
10.76%
16.45%
-50.72% 5
5.05
.3.43%
17.584
12.74. 5
27.34,
19.19.
5.79*,
2.39 5 0065
2034,
24.43, 5
42.05
45.93%
7.42%
30.35
2.98
0.074
13.93,0/
19,91%
2225%
27.20% I
1.17/
.....79 ..0087_ 17.90,0 7.694
16.74%
2.11% 5
0.82 $ 0.943
38.14%
15.399)
30.90,
5.3?.
720,0
30.49.0 $
4.89
-0.28%A -0.47%
1.07
0.047
9.44%
159.41% 139.63A
10331%
171.11% 5
562,
2.89 5
0.097
0.14O.
39.79%
42.91%
43.O2%
35.31%
7.485
4.13 5
0.105
7,4',0
9.28%
17.81 }
12.94%.
23.92,
634%
4.87 ! 0.29
23.50
-14.394
5
5.90
5
0.074
39.50
.44.70G%
11o.92%
-152.A
5.53.,
5.48
2.13
-3535, 5
3.02
0.090
22.09
4,670k
3.39%
25.989% -30.30% 5
2.66 5
6.084
-699,
29.859
31.38%
6.5?*.
3.00 5
0.078
-6.94,
616CA% 9.11%
6.5~/
12,62% 5
7.70A
.2.19,
-5.2f.
.3,97,0
-50.56%
6.79,
1.46 !
D.080 16.05%
.34.90% 5
4.950,
16.65%
5.62
0.18 5
0.015
9.5P
8,99%
96.11%
3256A 5
0.76 5
0.031
100.53%
79.83
6Z.4A
33.99,0 5
63.64%
61.40%
8.14%
1.02 $ 0.041
35.34,
45.01%4
7.47%
15.14f
10.41%
1.09
0.046
0
10.69,
13.98
8.47%k
S.,59,0
16.62'0
9.41%
14.84%
5
1.41
06.053
14.91%
2830
.17.3%
-2.12A 5
0.0 5
0.032
0.79,
6.51%
.20,434
-13.5P
12.270,
$
0.90
5
.04
42.14%
4.050,0
5.901Y.
0.63
9.15"A
59.43%A
57.83,
1.15 5
0.051
10.63A
27.54A
77.750
48.6(%
5
1.70
5
0.055
9.454
31.68%
29.37,A
7,93,
17324
2.4 !
0267
21.07,
17.40%A 43.199,
15.4504
70.29. $
133.31%
134.099,
169.1P.4
1.32 5
o,04
269.86%
5.71%
85.55,
-5.76'A
2.44 5
0.080
-.
449%
5.6.P.
14.59,
-5.96%
-22.47% $ 1.89 5
28.94
0.076
-5,50,0
29.96%A
7.740/0
.5.37/
_5.75,
3621% 5
-3,44%4
7.48,
2.58
0.076
.002%
1.03%
.14.7. 5
:0.55
1.92%
6.04°.4
220 j
0.95
2624
14.179
18&46O/ 30.81%
6`450
18.1 4%A
129
0061
17.58
12.49
10.394
32.56%
7.16.4
6.91/6
1.71 5
o64
5.09,
11.1,
9.04
-19.40% 5
1.3 5
o.04
.. 15,
7.69%
-3.61%
8&99,0
1.67 5
0.053
.16.78',
20.79%k
.2.859/
.2.71%
2.25 5
0.059
112A
3.88%
829%
34384ol 5
-},87%
17,45,
6.94%
4.49%
0.59 5
0.044
25.59%
-21.14O.
0.47
0.049
12.02,
-20.66% 5
-6.4%
521%
20.54%
20.67.,
65.55% 5
30.81%
0.78
0.049 - 1.2.,
12.42%A
1.51% .0.57, 5
0.78 $ 0.050
1230,0
17.12,0
7.71%
8.78,
19.71%
29.57.
36.61% 5
1.06 5
0.053
7.26,0
22.08%
37.36
14.630,
1125%
16`85,
9.01%
0.74 5
0.039
10.65,
0.37 5 0.044
12.89%
-50.20%
-22.06%
-22.01%
-2021%
0.0
0.043
-2.735"
117.930.05
41.94%
30.35,0
9.1P.,
43.59%
10.07%
0.97 5o .040
.5.95,
3.05".
3.2O%,
-9.69%.
21.44% 5
1.01%
.9.70, !
1.59%
.2.0O9%
9.088%
0.86 !
0.042
3.59%
8,37,0
1.815
00.67
-19.56%
-2639%
-.44%
-27.30
-19.86%
2.08
0.0o0
34.0,A0
4.12%
4.68,0
4.71°.4
1225 5
4.99%
35.49,0
6750,
35.09%
41.75A
47.50 5
3.07
0
.0.00
.4.7P.4
.3.7',
-1.5.
-3.16% 5
2.97
0.082 - .72%
7.11%
{
2.81
5
0.086
4.82%
.27%
7.61%
12.78%
-5.52%
12.09..
$ (o.y 5
. # DrV/0
#DIV/9
#DIV/01
#DIV/0
#DIV/0
#DIV/9
0.5
0.079 #DIV/0
39.07%
1649.71% 5
8.84
41.32,
53.15"/
.35.36% -119.71%
0o0 5
0.058
.26.61%
.3162,
8.241.4
0.850
0.059
2.81k
029 5
8.670,0
635/
-3.71% S
8.3%
.5.25%
5.4%
260.03o%{
1.05 o
.056
-6.24%
.3.79,
8.907k
5.28'/0
19.63
6.52%
5.50%A 9.00%
1.19 5 0,063
6.18.,
11,17%4
13.71%
43.43%
1.71
$
0,066
5.6,0
7.02,0
1425,0
12.47%/
13.95
33.181
0.072
6.95,0
7.34%
3.92%/ 86.23,
5.18%,
9,030,0
.69,0
2.28 5 0.067
-7.98%
7.18%A -28.36, S
26.72.
3.17 5 0,084
7.43,
6`8%
326%
39,01% I
7.79,0
-9.59% 1820%
0.66 S 0.072
-.
,59,
.8,07%A
.9990
5
1.35 5
0.000
21.999,
2.62%
103.84O.4
6.74,
.1.91%
1.64
06.077
-11.59%
022%
21.3(7. 5
7.64%
9.32%,
7.34%
106.42., 5
7.3.
3.38 5
0.008
13.96%
5.31%
7.42%
18.29%
24.06%
2060,
12.17% 5
3.79 5
0.105
19.07,
.80.0,% .115.92%S
~,36) S
nDIV/0
'50.58%
.50.00/
#DIV/CO
24.71%
7.399.0
26.02%
1.20
0.036 #DIV/0
.28.39% -430.168,0
5.A6
0,031
.13.030,0
3.97%
3.73%,
-0.91% $ 1.19 5
8.94%
,46,
27.1
4%
25.73,%
1.43 5
043
37,030,
20.60,0 5
26.099k
8.21%
12.77%A
3.22
0.049
14.59,0 -10.130k
41.40,
39.42%
124.51%
1.85%
0.41 5
0.041
5.97,0
0.71%
4.34%
29.18, 5
9.65,
1.49%
0.30 5
0.046
11.98%
5.27%,
4.010% .27.39%
9.07
3.01
.4.64%
0.42 5
0.046
0.56%
-529,0
40.71% 5
6.31%
8,60,
6`325.4
1096% 132.01% S
0.98 5
0.049
5.92,
7.36%
8.72,
14.63
1,46 6
0.054
10.88%
9.01%
11.48%,
12.89%
49.03, 0
2.32%
-0.29A
.5.7, 5
.5.530,/
567?/,
0,63 5
0.0
M.9A
53.49%
56.93.4
74.50°,0
1.10 5
8.36%
56.44%
0.042
4.07,0
7.670,0
1.03 5 o .053
25.85,0
12.20%
13.49i
7.54/6
-6.55%
14/29%
12.13%
10.19%
1.17
0.046
.13.C4
14.4
400 5
17.66%
3.202
4.80,
4.69%
.15.27,t !
0.99 ! 0.047
1.968%
10.48%
The Correlation Between Market Fundamentals and Apartment REIT Performance
77
Appendix 3
Market Cap Growth
REIT
I Aodtced Ettes Relty Copocion
2 Ap.rmen Inuo nto &
Mgmt.Co.
3 Amli RtoidontieProprcntiTrut
4 Archtone Communitie Tnrut
5 Aolny Commuiic inc
6 BREPropoei, Inc
7 iGmdenPro PeryTet
8 EquityRrideontil PropeirdcTrust
9 Essc Per
T rustInc
11 Gble Rsidentil Trult
11iHome Popeties
uo
Ne Yord,
In c
12 Mid.AmericAprtment Communiiet, nc
13 PostPopertin I.c
14 Robrt Reliy In tor Inc
15 SummitProperties nc
16 Chrnu E. Sith Reddeni,
l Ri
lty
17 Coentoneelul.
18 Tote
InoeomoTrst
d CUOttyTrs., The
19 UOitedDominionR.ly Trut Inc..
Mkse
M-s
rMb
Cp
,m.ruI.
c2
cMv
S 63.0
2A
$ 0.043
0.045
$
7799
2224' [
0.039
$
833.3
6.85' S
$
804.9
-3.41% 5
0.038
$ 784.5
-2.5
o0.035
5 1,041t3
0.028
9.02' 5
2,627.1
152J29 $ 0.049
4,807.4
82.99' $ 0.025
$ ,391.7
32.96 $ O028
0.036
5 9,340.3
46.13 5
641.1
27.25% 1
0.037
1
799.1
24.65'6
0.034
915.3
14.54'h 5
0.034
S
878.2
.4.05 $ 0028
1
990.0
12.73' 1
0.028
I Z8912
29.39' $ 0.049
1 3,6253
25.396 1
0.054
$ 5,365.5
480o%
0.065
{ 5,666.6
5.61% [
0.074
.087
1 6,018.3
6.21 I
1 1,026.7
84.66'h $ 0.043
1 1,708.5
66.41'h 1
0.047
0.097
4,1612
143.56% S
$ 4,362.3
4.83'h $ 0.105
5,5E9.6
28.13'h
0.129
1,125E
152.36'
0.074
; 1,800.3
59.91,h $ 0.090
5
0.84
;
1,920.6
6.6V00
$ 1,916.0
.0.24A 5
0.078
0.086
S 2405.8 . 25.56
5 744.8
18.94% S
0.015
| 1,550.1
10,.12'h
0.031
5 2,335.5
50.67 $ 0.041
$ Z585.6
10.71% S
0.046
1 2785.3
7.72'h
I0.055
1 4,081.
54.54'h $ 0032
I 8,979.4
120.0P/ $ 0.046
11,388.9
26.83h/
0.051
S t1796.6
1236' 5
0.055
t 5,093.5
17.95A
0.067
565.7
81.90'h 5
0084
$ 961.2
69.91
0.080
$ 1,052.0
9.45%
.OD76
$ 1,277.7
21.456 1
0.076
5 1.924.9
50.65A,
0.095
t1,O52.
48.41%
0.061
$ 1,269.9
20.62% {
0.064
1,741.9
37.17% $ 0.64
5 1,666.9
.431% $ 0.053
1,769.7
6.17%
0.059
t
30.0
5.A00%
0.044
$
670.1
117.56D
0.049
$ 1,169.6
74.54% $ 0.049
$ 1,676.2
43.31%
0.050
2,075.9
23,85'4, $ 0.053
1
749.7
17.31%
0.039
1,3383
78.51% $ 0.044
{ 1,423.5
6.37%
0,043
0.040
$ 1,383.3
.2.82' 5
S 1,408.0
1.79' 1 0.042
$ 1,5755
0.067
31.15.
2,374.2
0.090
50.710'
8 2608.8
9.88%
0.090
2,889.4
10.76%/ 5
0.082
0.086
1 3,083.1
6.70'1, o
S
#DIV/0l S
1
134.1 #DIV/0
5 0.079
5
135.5
1.04%'A$ 0058
$
146.4
8.041'
0.059
150.0
3.011
0.o05
t
894.0
27.28'6
0.063
5 1,054.3
17.83% $ 0.066
$ 1,282.3
21.63% 5
0.072
$ 1,336.6
423%h 5
0.067
I 1,701.4
27.29h 1
0.084
$ 1,190.0
18.899%5
0.072
$ 1,7252
44.970A
0.088
5 1,944.7
12772% 5 0.077
1999
2Z487.2
27.90' 5
0.08
2000 I
0.105
185.0
28.06% !
1996 I
#DIV/09
-#
1997 1
500.0 #DIV/0
0.036
1998 S 614.5
5.95% 5
0.031
1999 $ 903,6
47.05% 1
0.043
2000 5 092.7
0.049
.121%
S
555.8
5.97' 1 0.041
1996
1997 5
622.4
11.99,6 S
0.046
1998
0.046
678.2
8.97P I
1999
0.049
772.4
13.19,
821.6
637%, ,
2000
0.054
1996 $ 2,422.6
63.59/ $ 0.040
1997
2667.8
10.121,'
0042
1995
,704.6
38.86%
0.053
1999
3,643.9
-1.64A $
046
2000 5 3,588.4
_-1.52',j !
0.047
¥V
1996
1997
1998
1999
2000
AIV
1996
1997
1998
1999
2000
M .
1996
1997
1998
1999
20O0
ASN
1996
1997
1998
1999
2000
AiVB
1996
1997
1998
1999
2000
BRE
1996
1997
t998
1999
2000
CPT
1996
1997
1998
1999
2000
EQR
1996
1997
1998
1999
2000
ESS
1996
1997
1998
1999
2000
GBP
1996
1997
1998
1999
2000
1996
1997
1998
1999
2000
MAA
1996
1997
1998
1999
2000
PPS
1996
1997
1998
1999
2000
RPI
1996
1997
1998
1999
2000
SMT
1996
1997
1998
1999
2000
SRW
1996
1997
'rk.
AEC
TCR
TCT
UDR
%A
hI Cp
- .1t
Cv R
5.899
7.49A
3.289
8.86%
-11.41'A
-3.43,
9.750,
1020A
-7.92
570
28.415
75.46'
4.20
.49.10
4.555
4.75'A
11.299
32.229
6.54'A
6.749
-2.909
.8.14"A
6.51%,
7.34
-.
1,31
.16.420A
8.34'9
7.269
.1.04'A
6.719
-12.85
5.85
10.765.
5.79
20.34°
7.42'
13.9,7
7.69'
17.975
38.149,
5,37
4B.0,
9.445
10.14A
5.62'
7.48'i
7.4YJ
23.53',
6.849
39.50A
5.52A
22.09'
4.67'
.6S9
637
.6.94
7.70'
6.79A
10O.05'
6.98'A
9.58'
100.53'A
6.83'
35.34
8.149
10.69A
8.47PA
8.59%
14.91
6.51'
0,79'A
42.149
4.859
10.63'
6.92'A
9.45'
8.32'A
7.93'A
21.07/
269.8
5.71U
5.63'
-4.49'
.5.52A
7.74A
-0.029A
7.48'
26.20'
6.45%3
17.5/
6.9194
5.09
-0.15
-16.78%
8.99PA
8.390
11.32'
6.94A
25.59A
12.02'
521ff
6.674
.120'3
7.71%A
1.33"
8.7A
7.26
10.85'h
9.010A
12z894
6.22'
-2.7y
9.18ff
.5.950
10.07'A
3.59A
9.88'A
6.371A
-19.56A
4.99A
34.001
-0.021o
6.75'h
7.11%
-8.721
4.82'
7.61
#DIV/0
#DIV/OI
.849f
#DIV/9
-26.61A
824ff
2.87
8.67PA
8.90'
-624'h
6.18
6.52'A
5.63'/a
7.02
8.95,
734'A
8.69',
.7.98'h
7.43f
26.72'
7.79%
.3.58'h
21.989
6.74%
-11.5P,6
7.64%
13.96'A
733'
7.42,A
19.07%6
DIV/09 #DIV/O
7.38'h
#DIV/01
-13.0 '
.94
37.O3'
14.58"/
10.13A
5.97A
9.65A
9.07,6
11.98'
0.56
5.92'
8.72'/
9.01%
10.8B%
5.67,
34.9,'A
4.07%
8.36%
7.54%/
25.85%
10.19%
-13.04'A
10.48h,
1.96,h
The Correlation Between Market Fundamentals and Apartment REIT Performance
78
Appendix 4
Weighted Averages
REIT
I Aesoeited Estate RealtyCrpoqotion
2 Apatment Investment&
MgmLCo.
3 Ai
Residetial Propetia Trust
4 ArchstoneCommunitie Trust
Ti.ker Yeer
AEC
1996
1997
1998
1999
2000
AIV
1996
1997
1998
1999
2000
AML 1996
1997
1998
1999
200
ASN
1996
1997
1998
1999
AlonBay Communitie Inc
6 BRE Ptoperti
7 Cmden
ropes
Inc.
AVB
BRE
Trust
CPT
8 Equi Reidenta PropesfiesTrust
EQR
9 Es-
ESS
Ppert Trust.,
Inc
10 Gbles Reidential Tust
GBP
11 Home Propeti orNew Yor , Inc
RE
2000
1996
1997
199B
1999
2000
1996
1997
1998
1999
2000
1996
1997
1998
1999
2000
1996
1997
1998
1999
2000
1996
1997
1998
Aparme ntCommunitie. Inc.
MAA
.Propeti,Inc
PS
14 RoberReal Inveto,
ty
Inc
RPI
1I Summit PNopertcsInc
SMT
SRW
17 Cotnest.nc Real I.m
TCR
Trust
18 T-~n sd CounU7 Trust, The
19 UnitedDominion Raq Trust. Inc
TCT
UDR
2.74%
3.68%
3.68%
2.97%
35%
3.88%
329%
3.42%
4.10%
2.59%
320%h
422Y
4.31%
4.79%
2.64%'
4.800/
1.98%
3.4%
4.48%
2.32.
3.45%
4.12%
3,7(P/
2.93%
4.10%
7.74%
5.77%
5.94
4.54%
4.79%
5.50%
5.58F
4.04%
297/0
4.48%
3.65/
3.87%
2.r97%
3.73%
328%
1.97r/
3.63%
3.02%
M3.65
3.18%
363%
4.01%
3.98%
4.34%
2.12A
3.22%
1999
4.57/
3.1'h
2000
1996
1997
1998
4.64'
3.61%
3.58P
3.72Oh
3.16%
2.98%
2.70%
4.64%
3.78A
423%
3.06%
1.14%
2.98%
529%'
2.67"
329%
3.0%
3.05%
3.64%
3.32/
3.52% ,
3.51%
3.9
3.56A
4.6%
3.79/
4.00%
3.41%
3.49
5.36%
3.48%
3.71%
324%
329'h
3.63'
3.93'
3.33A
2.71%
3.32
2.30'%
0.54'%
2.79/
3.06A
3.42/
3.41%
4.50O'
3.851%
3.37%
3.69P
2.18%
0.99/
5.56A
4.068%
3.4%
4.94%
4.10A
4.16'h
3.39%
3.56A
2,63%
3.12%
2.87%/
225%
3.49'
1.69%
1.79%
1.4P%
1.91%
329'h
4.09P
2.94%
2.98%A
3.09%
3.32'h
4.15%
1.6%/
5.84%
5.14'h
3.42%
5.00%
3.74'h
3.77°0
3.41%
3.69'h
5.22%
2.43'
2000
1996
1997
1999
1999
200o
1996
1997
1999
2000
1996
1997
1998
1999
2000
1996
1997
1998
1999
200O
1996
1997
16 Chales E. Smith ResldentalRe ty
2.97%
3.85%
923'h
7.64%
5.78%0
1999
13 Post
NREI
WARG
4.94%
3.92%
3.06
4.44%
3.42%
4.14%
3.79%
4.70%
324%
3.5'8%
2.48%
3.28%
4.33%
2.I5
2.49%'
3.76%
5S9h
1999
12 Mid-Ami
GOVT
WARG
2944'
2.51%
3.50%
181%
3.42/
2.81%
3.57%
2.96%
2.82'h
3.58%
3.47
3.74
425%h
1998
1999
2000
1996
1997
1998
1999
2000
1996
1997
1998
1999
2000
1996
1997
1998
1999
2000
1996
1997
I993
1999
2DO
287N
3.81%
3.09%
3.50%
2.96'h
3.75P
324%'
3.04'h
3.62'h
3.91/
3.50%
4.5SO
41/
4.32%
Z889%
3.62'
WAEG
1.899h
1.3%
2.29%
2.01%
1.58'h
3.59%
3.51%
3.07%
2.64A
2.18%
3.522
3.49%
1.92
3.579
3.37%
3.78
WASG
0.97/
0.99%
1.10%
126%
1.53%
1.87%
1.90o/
1.72%
1.99%
1.81%
Z43%
2.16%
2.38%
2.73h
2.64%
2,05%
WAED
0.92%
0.84%/
1.20%h
0.75%/
0.05%
1.72/D
1.61%
1.35'b
0.65/
0.37h
1.09%
1.33%/
1.5I4%
0.84h
0.72%/
1.73%
3.79A
2.07"
1.72%A
3.87/
3.49%/
3.16%
2.13%/
2.85
3.04%
2.33'
2.04%
3.88%/
3.91%
4.13%
3.80TA
3.53%
2.27%
2.36%
224%
1.35%
1.46/
1.46/
1.65'h
1.61%
1.55Y
1.65%
1.80%
1.85/
1.57%
1.60%
1.13%
0.93%
0.78%
1.40/h
1.58%
0.68%
0.44%
2.33%
2.26/
2.33%
1.95'h
1.96%/
4.42%/
2.85/.
1.57%
5.05/
4.31%
4.38A
2.91%
2.93'
3.35Y
2.15%/
1.38%
1.02°A
3.68%
2.58h%
.L0MA
3.60%
3.49%
3.48%
3.06%
2.81%
3.25%
3.83%
3.98%
2.53%
2.19'h
3.37%
3.71%
4.56%
3.62%
3.65Y
2.07/
1.98%
2.03%b
2.2%
2.14%
0.95Y
1.26/
1.36.
1.42'h
1.19%/
2.11%
2.0A
2.36%
2.93.
2.59A
1.53h
1.52A
1.45/
0.86%
0.67%
2.30%
2.58%
Z60
1.11%
1.00A
1.26%
1.62%/"
2.20%
0.69/
1.06%
2.53%/
0.98/6
1.55%
2.39%
1.85%
1.79%
0.84
0.90/
1.16%
1.55%
0.95%/
0.63%A
1.49%/.
122%/
0.27/
2.77%
2.86%
2.84%
2.46%
1.39%/"
1.79t
1.46
1.471/
1.39P
1.06%
1.39/
0.99%
1.87%
1.72%
0.15%
3.90/
2.80
9
1.19%
3.96%
436A
4.21%
4.32%
4.3P
3.42%
3.91%
4.59%
4.79%
2.71%
326%
3.36%
3.59%
3.35%
0.18%
2.39%
222eh
2.40A
2.67A
3.00%
2.96'/.
2.91%
2.51%
2.69%/
2.69%
2.92%
2.18%
2.37%/
2.50%
2.88%
329%
3.589%
4.16%/
3.25Y
1.56%
1.68%
1.21%
1.36%
1.39'h
0.90/
1.21%
1.90
1.86%/
0.53%
0.89h
0.86%
0.71%
0.06'h
-3.40/
-1.77%
-1.02%A
2.70/
3.56/
-0.97%
2.75%
328%
-0.53%
2.97%
1.78%
1.189%
3.53%
3.47
3.43h
2.45/
0.49A
2.66%
229/
2.39%
2.49%
2.95Y
3.42A
3.48%
3.01%
2.51%
2.01%
2.19A
2.35A
2.36%
126%
1.44%
1.61%
2.00%
2.18%
1.75%
1.81%
2.01%
222%
2.21%
1.53%
129%
1.08/h
0.09%
-0.77%
1.22%
0.67/
039'h
0.31%
120%
1.61%
1.47/
0.79%/
0.301
The Correlation Between Market Fundamentals and Apartment REIT Performance
79
Appendix 5
1996 - 2000 Average - Weighted Averages
AveraPe 1996 - 2000
# REIT
1 Associated Estates Realty Corporation
2 Apartment Investment & Mgmt. Co.
3 Amli Residential Properties Trust
4 Archstone Communities Trust
5 AvalonBay Communities Inc.
6 BRE Properties, Inc.
7 Camden Property Trust
8 Equity Residential Properties Trust
9 Essex Property Trust, Inc.
10 Gables Residential Trust
11 Home Properties of New York, Inc.
12 Mid-America Apartment Communities, Inc.
13 Post Properties, Inc.
14 Roberts Realty Investors, Inc.
15 Summit Properties Inc.
16 Charles E. Smith Residential Realty
17 Cornerstone Realty Income Trust
18 Town and Country Trust, The
19_____United Dominion __
RealtyI Trust, Inc. __
Ticker
AEC
AIV
AML
ASN
AVB
BRE
CPT
EQR
ESS
GBP
HME
MAA
PPS
RPI
SMT
SRW
TCR
TCT
UDR
____
GOVT
NREI
WARG
WARG
2.82%
3.96%
3.15%
3.89°/0
3.62%
3.30%
3.53%
3.74%
3.82%
5.76%
3.55%
4.51%
3.13%
3.37%
3.37%
3.88%
4.11%
6.22%
3.41%
3.04%
3.03%
4.37%
4.03%
3.40%
3.87%
2.87%
3.81%
2.03%
3.38%
3.28%
2.42%
4.08%
3.76%
3.92%
2.54%
3.77%
3.32% _____ 3.87%
WAEG
1.92%
3.00%
3.57%
3.62%
2.48%
3.85%
4.37%
3.29%
3.16%
3.78%
'2.01%
2.56%
4.15%
4.20%
3.26%
2.05%
3.17%
2.06%
3.07%
The Correlation Between Market Fundamentals and Apartment REIT Performance
WASG
1.17%
1.86%
2.47%
2.20/0
1.51%
1.68%
2.92%
2.08%
1.24%
2.41%
1.02%
1.57%
2.77%
2.75%
2.65%
3.57%
2.14%/o
1.700/o
2.00%
WAED
0.75%
1.14%
1.10%
1.42%
0.97%
2.17%
1.44%
1.20%
1.92%
1.37%
0.99%
1.00%
1.38%
1.45%
0.61%
-1.52%
1.03%
0.360/a
1.07%
-
80
Appcndlx 6
Concentrtion -2000
Geographic
2
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Append 7
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The Correlation Between Market Fundamentals and Apartment REIT Performance
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App
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The Correlation Between Market Fundamentals and Apartment REIT Performance
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Appendix 8
Geographic Conenttions. - 1998
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Appendix 9
Geographic Concentraions -1997
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The Correlation Between Market Fundamentals and Apartment REIT Performance
97
Appendlx 10
Geographi Concentrlaon -1996
100L.dAbm,
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98
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Appedi 10
Geogphi Concentration - 199
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The Correlation Between Market Fundamentals and Apartment REIT Performance
100
Appendix 11
WARG v. WAEG WASG Results
Govt WARG v. WAEG, WASG
Resion Statirties
Multiple R
0.324732045
R Square
0.105450901
Adjusted R Square 0.086004181
Standard Error
0.007218946
Observations
95
ANOVA
df
Regression
Residual
Total
Intercept
WAEG
WASG
SS
2
92
94
MS
F
Sinifiance F
0.000565173
0.004794412
0.005359586
0.000282587
5.21132E-05
5.422554713
0.005940082
Coeffidients
StandardError
0.028927222
0.003017706
0.295090251
0.090955821
-0.213957486
0.117706261
t Stat
9.585832784
3.244325084
-1.817723919
P-value
1.69733E-15
0.001641762
0.072361243
Lower 95%
0.022933798
0.11444414
-0.44773228
Upper95%
0.034920646
0.475736362
0.019817308
Lowtr 95.0%
0.022933798
0.11444414
-0.44773228
Upper95.0%
0.034920646
0.475736362
0.019817308
NREI WARG v. WAEG, WASG
Reion StatiSti.s
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.527452059
0.278205674
0.262514493
0.010895403
95
ANOVA
df
SS
0.004209465
0.010921301
0.015130767
MS
0.002104733
0.00011871
F
17.73006598
Signifiance F
3.06916E-07
Coeffidients
StandardErrr
0.060642803
0.00455456
-0.077721664
0.137277701
-0.924576985
0.177651576
t Stat
13.31474574
-0.566163797
-5.204440103
P-value
3.56402E-23
0.572660907
1.17635E-06
Lower 95%
Upper95% Lower95.0% Upper95.0%
0.051597054 0.069688551 0.051597054 0.069688551
-0.350367028 0.194923699 -0.350367028 0.194923699
-1.277408349 -0.571745621 -1.277408349 -0.571745621
Regression
Residual
Total
Intercept
WAEG
WASG
2
92
94
Average Govt WARG v. Average WAEG & WASG
Rtgosion Statistics
Multiple R
0.742580571
R Square
0.551425904
0.495354142
Adjusted R Square
Standard Error
0.003172582
Observations
19
ANOVA
df
Regression
Residual
Total
Intercept
WAEG
WASG
SS
0.00019797
0.000161044
0.000359014
MS
9.89849E-05
1.00653E-05
F
9.834288862
Ssnificance F
0.001639357
Coeffaents
StandardErnmr
0.025620884
0.003261855
0.109072992
0.479364224
-0.332225506
0.127155
tStat
7.854697291
4.39489386
-2.612760069
P-value
7.02843E-07
0.000452009
0.018845707
Lower95%
Upper95% Lower95.0% Upper95.0%
0.018706061 0.032535706 0.018706061 0.032535706
0.248139862 0.710588585 0.248139862 0.710588585
-0.601782003 -0.062669009 -0.601782003 -0.062669009
2
16
18
The Correlation Between Market Fundamentals and Apartment REIT Performance
101
Appendix 11
WARG v. WAEG WASG Results
Average NREI WARG v. Average WAEG & WASG
Rignsson Statistis
Multiple R
0.638454687
R Square
0.407624388
Adjusted R Square
0.333577436
Standard Error
0.007653567
Observations
19
ANOVA
df
Regression
Residual
Total
Intercept
WAEG
WASG
SS
MS
F
0.000644927
0.000937233
0.001582161
0.000322464
5.85771E-05
5.504944899
Coeffldents
StandardEnor
0.062091581
0.007868929
-0.275777764 0.263128695
-0.696699748 0.306749897
t Stat
7.890728177
-1.048071798
-2.271230585
P-valae
6.62564E-07
0.310180375
0.037292493
2
16
18
SignificanaF
0.015162729
Lower 95%
Upper95%
Lower95.0% Upper 95.0%
0.0454102 0.078772962
0.0454102 0.078772962
-0.833585553 0.282030024 -0.833585553 0.282030024
-1.346980334 -0.046419163 -1.346980334 -0.046419163
The Correlation Between Market Fundamentals and Apartment REIT Performance
102
Appendix 12
Panel Data Results without Apartment Growth
% Change in FFO per Unit v. Weighted Average Rent Growth (Govt Data)
Reission Statitms
Multiple R
0.014068772
0.00019793
R Square
Adjusted R Square
-0.010669483
Standard Error
0.307616636
Observations
94
ANOVA
1
92
93
SS
0.001723478
8.705775513
8.707498991
MS
0.001723478
0.094627995
F
0.018213197
Siqnfwance F
0.892941268
Coeffwients
0.091000127
0.589475334
StandardError
0.149712822
4.36789861
tStat
0.607831219
0.134956277
P-Value
0.544796963
0.892941268
Loer95%
-0.206342461
-8.085548332
df
Regression
Residual
Total
Intercept
WARG
Upper95%
0.388342715
9.264499
Loer 95.0%
-0,206342461
-8.085548332
Upper95.0%
0.388342715
9.264499
% Change in FFO per Unit v. Weighted Average Rent Growth (NREI Data)
Pagtcesiyn Statirtis
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.296930873
0.088167943
0.078256725
0.293771886
94
ANOVA
df
1
92
93
SS
0.767722276
7.939776715
8.707498991
MS
0.767722276
0.086301921
F
8.895772761
Significance F
0.003658711
Ceff-icfts
-0.172569871
7.240973122
Standard Ervr
0.099705799
2.42775633
IStat
-1.730790714
2.982578207
P-vale
0.086841753
0.003658711
Loer 95%
-0.370594194
2.419239492
Regression
Residual
Total
Intercept
WARG
Upper95%
0.025454452
12.06270675
Loar95.0%
-0.370594194
2.419239492
Upper 95.0%
0.025454452
12.06270675
Lower95.0%
-0.236571327
-3.308884101
Upper950%
0.222772642
10.84426386
%Change in FFO per Unit v. Weighted Average Employment Growth
Rerssion Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.109580441
0.012007873
0.001268828
0.305794412
94
ANOVA
df
Regression
Residual
Total
Intercept
WAEG
1
92
93
SS
0.104558543
8.602940448
8.707498991
MS
0.104558543
0.093510222
F
1.118150942
SienifsncrF
0.293085625
Coefficients
-0.006899343
3.767689882
StandardEror
0.115640485
3.563074736
t Stat
-0.059662
1.057426566
P-vae
0.952554245
0.293085625
Loner 95%
-0.236571327
-3.308884101
Upper95%
0.222772642
10.84426386
The Correlation Between Market Fundamentals and Apartment REIT Performance
103
Appendix 12
Panel Data Results without Apartment Growth
%Change in FFO per Unit v. Weighted Average Stock Growth
Rereion Stairti
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.02708513
0.000733604
-0.010127987
0.307534217
94
ANOVA
df
1
92
93
Regression
Residual
Total
Coeffientsr
StandardError
0.135775414
-1.203275306
Intercept
WASG
SS
0.006387859
8.701111133
8.707498991
0.101398437
4.629997963
MS
0.006387859
0.094577295
tStat
1.339028663
-0.25988679
F
0.067541143
P-luse
0.18386043
0.795531821
Signifxnce F
0.795531821
Loer95%
-0.065610635
-10.39885091
Upper95%
0.337161463
7.9923003
Lower95.0%
-0.065610635
-10.39885091
Upper 95.0%
0.337161463
7.9923003
Loer95.0%
-0.032965072
-2.564556309
Upper950%
0.160380608
11.58987905
Lower95.0%
-0.026980969
0.809666376
Upper95.0%
0.037796408
1.015403042
% Change in FFO per Unit v. Weighted Average Excess Demand
Rensrrion Sakirc
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.130894587
0.017133393
0.00645006
0.305000178
94
ANOVA
1
92
93
SS
0.149189002
8.55830999
8.707498991
MS
0.149189002
0.093025109
F
1.603749826
Snifricnce F
0.208569659
Coefficwient
0.063707768
4.512661369
Standard Ermr
0.048675045
3.563398839
t Stal
1.308838406
1.266392445
P-vaue
0.19384906
0.208569659
Lorwr 95%
-0.032965072
-2.564556309
df
Regression
Residual
Total
Intercept
WAED
Upper95%
0.160380608
11.58987905
% Change in FFO per Unit v. %Change in Rental Revenue per Unit
Reclrsion Statirtit
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.878280019
0.771375791
0.768890745
0.147100419
94
ANOVA
df
1
92
93
Regression
Residual
Total
Coeffirntr
Intercept
%D Rent Rev per Unit
0.00540772
0.912534709
SS
6.716753924
1.990745067
8.707498991
StandardEror
0.016307795
0.051794493
MS
6.716753924
0.021638533
F
310.4070788
Sinifgcan F
3.11527E-31
tStat
0.331603365
17.61837333
P-Vale
0.740942985
3.11527E-31
Lower 95%
-0.026980969
0.809666376
Upper95%
0.037796408
1.015403042
The Correlation Between Market Fundamentals and Apartment REIT Performance
104
Appendix 12
Panel Data Results without Apartment Growth
% Change in FFO per Unit v. %Change in Rental NOI per Unit
Reression Staitics
0.891236439
0.79430239
0.792066547
0.139529946
94
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
ANOVA
df
1
92
93
SS
6.916387262
1.791111729
8.707498991
MS
6.916387262
0.019468606
F
355.2584787
Sign4ance F
2.3781E-33
Coeffcient
-0.009207134
0.926996028
StandardEmr
0.015735786
0.049181939
Stat
-0.585107977
18.84830175
P-value
0.559907482
2.3781E-33
Lwer95%
-0.040459763
0.829316452
Regression
Residual
Total
Intercept
%D Rental NOI per Unit
Upper 95%
0.022045495
1.024675605
Lowr 95 0%
-0.040459763
0.829316452
Upper 95. 0%
0.022045495
1.024675605
Loaer95.0%
0.197331232
0.03482518
Upper95.0%
0.342301942
0.289765674
% Change in FFO v. %Change in Number of Apartments
Reegssion Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.254923966
0.064986228
0.054823035
0.318792839
94
ANOVA
df
Regression
Residual
Total
Intercept
# Apts
1
92
93
Coefficents
0.269816587
0.162295427
SS
0.649842731
9.34985642
9.999699151
MS
0.649842731
0.101628874
F
6.394272656
Sgnificarn F
0.013152117
StandardErrr
0.036496578
0.064181625
tStat
7.39292832
2.528689909
P-alPe
6.4605E-11
0.013152117
Lwer 95%
0.197331232
0.03482518
Upper 95%
0.342301942
0.289765674
% Change in Rental Revenue per Unit v. Weighted Average Rent Growth (Govt Data)
Renssion Statitic
Multiple R
0.084160568
0.007083001
R Square
-0.003709575
Adjusted R Square
0.295048143
Standard Error
Observations
94
ANOVA
df
Regression
Residual
Total
Intercept
WARG
1
92
93
SS
0.057131808
8.008913427
8.066045235
MS
0.057131808
0.087053407
F
0.656284575
Sifzancr F
0.419965221
Coeffientr
0.001747998
3.393920888
StandardEwr
0.143595908
4.189436539
tStat
0.012173038
0.810113927
P-Yalae
0.99031392
0.419965221
Laer 95%
-0.28344587
-4.926661701
Upper 95%
0.286941867
11.71450348
The Correlation Between Market Fundamentals and Apartment REIT Performance
Lower95.0%
-0.28344587
-4.926661701
Upper 95.0%
0.286941867
11.71450348
105
Appendix 12
Panel Data Results without Apartment Growth
%Change in Rental Revenue per Unit v. Weighted Average Rent Growth (NREI Data)
ReiRresrrion
Statirtii
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.273574716
0.074843125
0.064787072
0.284802701
94
ANOVA
df
1
92
93
SS
0.603688035
7.462357201
8.066045235
MS
0.603688035
0.081112578
Ceffcient
-0.135797299
6.420977501
StandardError
0.096661669
2.353634207
Sta
-1.404872279
2.728111906
Regression
Residual
Total
Intercept
WARG
F
7.442594569
P-Vae
0.163426777
0.007630005
Srnifcn
F
0.007630005
Lor 95%
-0.327775717
1.746456806
Upper95%
Lower950%
0.056181119
11.0954982
-0.327775717
1.746456806
Upper95.0%
0.056181119
11.0954982
%Change in Rental Revenue per Unit v. Weighted Average Employment Growth
Regrnion Stairficr
Multiple R
0.060028008
R Square
0.003603362
Adjusted R Square
-0.007227036
Standard Error
0.295564683
Observations
94
ANOVA
d/
1
92
93
SS
0.029064879
8.036980356
8.066045235
MS
0.029064879
0.087358482
F
0.332708153
Signifance F
0.565477467
Ceeffwientr
0.053407967
1.986459196
Sbandard Ener
0.111771968
3.443879339
t Sa
0.47782971
0.576808593
P-Vwale
0.633904792
0.565477467
Lewr 95%
-0.16858081
-4.85338244
Regression
Residual
Total
Intercept
WAEG
Upper 95%
0.275396744
8.826300831
Lwer 95.0%
-0.16858081
-4.85338244
Upper 95.0%
0.275396744
8.826300831
%Change in Rental Revenue per Unit v. Weighted Average Stock Growth
Reorision Slailicr
0.092206001
Multiple R
R Square
0.008501947
-0.002275206
Adjusted R Square
Standard Error
0.294837246
Observations
94
ANOVA
df
Regression
Residual
Total
Intercept
WASG
1
92
93
SS
0.068577086
7.997468149
8.066045235
MS
0.068577086
0.086929002
F
0.788886159
Sinnifance F
0.376753427
CoeffWcintr
0.197444295
-3.942546915
StandardErrr
0.097212064
4.438842154
Sta
2.031067822
-0.888192636
P-value
0.045133793
0.376753427
Laoer95%
0.004372745
-12.75847058
Upper95%
0.390515846
4.873376754
The Correlation Between Market Fundamentals and Apartment REIT Performance
Laewr95.0%
0.004372745
-12.75847058
Upper95.0%
0.390515846
4.873376754
106
Appendix 12
Panel Data Results without Apartment Growth
%Change in Rental Revenue per Unit v. Weighted Average Excess Demand
Rrtsrion Statiri
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.13174417
0.017356526
0.006675619
0.293517771
94
ANOVA
df
Regression
Residual
Total
SS
1
92
93
Coeffzientr
Intercept
WAED
0.139998527
7.926046708
8.066045235
StndardEnrr
0.069868446
4.371455625
0.046842565
3.429246794
MS
0.139998527
0.086152682
tStat
1.491558934
1.274756787
F
1.625004866
P-value
0.139235874
0.2056055
Significance F
0.2056055
LoaWr95%
-0.023164931
-2.439324513
Upper95%
0.162901823
11.18223576
Lwr 95.0%
-0.023164931
-2.439324513
Upper 95.0%
0.162901823
11.18223576
% Change in Rental NOI per Unit v. Weighted Average Rent Growth (Govt Data)
Refrion Sttirts
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.080268703
0.006443065
-0.004356467
0.294824957
94
ANOVA
4/
Regression
Residual
Total
SS
1
92
93
Coeffientr
Intercept
WARG
0.051858034
7.996801473
8.048659507
Sfndrd Enmr
0.021087185
3.233484292
0.143487286
4.186267479
MS
0.051858034
0.086921755
Stat
0.146962043
0.772402697
F
0.596605927
P-Vale
0.883483554
0.441855712
Signi[ane F
0.441855712
Lower95%
-0.263890952
-5.080804269
Upper95%
0.306065321
11.54777285
Lwer 95.0%
-0.263890952
-5.080804269
Upper 95.0%
0.306065321
11.54777285
%Change in Rental NOI per Unit v. Weighted Average Rent Growth (NREI Data)
ReMion Siaftitir
Multiple R
0.248392412
R Square
0.06169879
Adjusted R Square
0.051499864
0.286509484
Standard Error
Observations
94
ANOVA
df
Regression
Residual
Total
SS
1
92
93
Caeffrients
Intercept
WARG
-0.098460641
5.82364599
0.496592557
7.552066951
8.048659507
StandardError
0.097240949
2.367739211
MS
0.496592557
0.082087684
Stat
-1.012542991
2.459580837
F
6.049537895
P-value
0.31393409
0.015778731
Sni*cance F
0.015778731
Loer 95%
-0.29158956
1.12111154
Upper95%
0.094668277
10.52618044
The Correlation Between Market Fundamentals and Apartment REIT Performance
Loer950% 95. Upper
-0.29158956
1.12111154
0%
0.094668277
10.52618044
107
Appendix 12
Panel Data Results without Apartment Growth
% Change in Rental NOI per Unit v. Weighted Average Employment Growth
Reftnuion Statrtics
Multiple R
0.083498065
R Square
0.006971927
Adjusted R Square
-0.003821856
Standard Error
0.29474648
Observations
94
ANOVA
df
1
92
93
SS
0.056114666
7.992544841
8.048659507
MS
0.056114666
0.086875487
F
0.645920589
Siniwnc F
0.423646671
Coeffident
0.043214497
2.760155683
Standar Errr
0,111462553
3.434345743
t Stat
0.387704174
0.80369185
P-vale
0.699130526
0.423646671
Lover95%
-0.178159754
-4.060751407
Regression
Residual
Total
Intercept
WAEG
Upper95%
0.264588749
9.581062772
Loaer95.0%
-0.178159754
-4.060751407
Upper95.0%
0.264588749
9.581062772
Lower 95.0%
-0.005440926
-11.63385486
Upper95.0/
0.381097452
6.016041412
Loer 95.0%
-0.010053663
-2.334025855
Upper95.0%
0.175736485
11.26728471
%Change in Rental NOI per Unit v. Weighted Average Stock Growth
Refresnon Statitics
Multiple R
0.065763995
R Square
0.004324903
Adjusted R Square
-0.006497652
Standard Error
0.295139058
Observations
94
ANOVA
df
1
92
93
SS
0.034809671
8.013849836
8.048659507
MS
0.034809671
0.087107063
F
0.399619389
SianircasaF
0.528853757
Coeffientr
0.187828263
-2.808906726
StandardErr
0.097311576
4.443386
tSlat
1.93017389
-0.632154561
P-vale
0.056665551
0.528853757
Lower 95%
-0.005440926
' -11.63385486
Regression
Residual
Total
Intercept
WASG
Upper 95%
0.381097452
6.016041412
% Change in Rental NOI per Unit v. Weighted Average Excess Demand
ReArion Statirics
Multiple R
0.134757766
R Square
0.018159656
Adjusted R Square
0.007487478
Standard Error
0.293081429
Observations
94
ANOVA
df
Regression
Residual
Total
1
92
93
Coficintr
0.082841411
4.466629428
Intercept
WAED
SS
0.146160885
7.902498623
8.048659507
MS
0.146160885
0.085896724
F
1,701588578
Sinifcan F
0.19533424
StandardEnrror
0.046772929
3.424148902
Stat
1.771140125
1.304449531
P-value
0.079849082
0.19533424
Lor 95%
-0.010053663
-2.334025855
Upper95%
0.175736485
11.26728471
% Change in Net Income per Unit v. Weighted Average Rent Growth (Govt Data)
RcWrusion Stadrdi
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.138561413
0.019199265
0.008421235
0.783637583
93
The Correlation Between Market Fundamentals and Apartment REIT Performance
108
Appendix 12
Panel Data Results without Apartment Growth
ANOVA
df
Regression
Residual
Total
Intercept
WARG
SS
MS
F
Srnifwnt F
1
91
92
1.093895224
55.88199535
56.97589057
1.093895224
0.614087861
1.781333411
0.185315499
Coeffzcients
0.698715128
-14.85329009
Standar Error
0.381389048
11.12884404
IStat
1.832027245
-1.33466603
P-te
0.0702185
0.185315499
Lover 95%
-0.058867442
-36.95937389
Upper95%
1.456297697
7.252793708
The Correlation Between Market Fundamentals and Apartment REIT Performance
Lomer95,0%
-0.058867442
-36.95937389
Upper 950%
1.456297697
7.252793708
109
Appendix 12
Panel Data Results without Apartment Growth
%Change in Net Income per Unit v. Weighted Average Rent Growth (NREI Data)
Reemsion Statistcs
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.120588376
0.014541556
0.003712343
0.785496081
93
ANOVA
1
91
92
SS
0.828518127
56.14737244
56.97589057
MS
0.828518127
0.617004093
F
1.342808155
Sinifmanc F
0.249571236
Coffint
-0.099378804
7.64208542
StandardError
0.272021831
6.594849708
tfSta
-0.365333928
1.158795994
P-value
0.715709937
0.249571236
Lower 95%
-0.639716809
-5.457774706
df
Regression
Residual
Total
Intercept
WARG
Upper 95%
0.440959201
20.74194555
Lovr 95,0%
-0.639716809
-5.457774706
Upper95.0%
0.440959201
20.74194555
% Change in Net Income per Unit v. Weighted Average Employment Growth
Raexresion Statitcs
0.068263648
Multiple R
0.004659926
R Square
-0.006277877
Adjusted R Square
Standard Error
0.789424517
Observations
93
ANOVA
SS
df
1
91
92
0.265503409
56.71038716
56.97589057
0.01398557
6.007433211
StandardError
0.298535647
9.203743567
Regression
Residual
Total
Coeffciens
Intercept
WAEG
MS
0.265503409
0.623191068
0.426038535
SirnifiWanc F
0.515584772
t Stat
0.046847237
0.652716274
P-value
0.962737639
0.515584772
Louver95%
-0.579018879
-12.2746746
F
Upper 95%
0.606990019
24.28954102
Lower 95.0%
-0.579018879
-12.2746746
Upper 95 0%
0.606990019
24.28954102
Lower 95.0%
-0.6395228
-7.70950059
Upper 95.0%
0.387413076
39.26231447
% Change in Net Income per Unit v. Weighted Average Stock Growth
Remcrssion
Stamtitic
0.138526964
Multiple R
0.01918972
R Square
0.008411585
Adjusted R Square
Standard Error
0.783641396
Observations
93
ANOVA
lf
1
91
92
Regression
Residual
Total
Coeffucint
Intercept
WASG
-0.126054862
15.77640694
SS
1.09335138
55.88253919
56.97589057
StndardError
0.258494659
11.82348735
MS
1.09335138
0.614093837
F
1.780430471
SigniofaneF
0.185425874
t Stat
-0.487649772
1.334327722
P-value
0.626970731
0.185425874
Loer 95%
-0.6395228
-7.70950059
Upper 95%
0.387413076
39.26231447
The Correlation Between Market Fundamentals and Apartment REIT Performance
110
Appendix 12
Panel Data Results without Apartment Growth
% Change in Net Income per Unit v. Weighted Average Excess Demand
Rerrston StStiricr
Multiple R
0.038866412
R Square
0.001510598
Adjusted R Square
-0.009461813
Standard Error
0.790672428
Observations
93
ANOVA
df
Regression
Residual
Total
Intercept
WAED
1
91
92
SS
0.086067665
56.8898229
56.97589057
MS
0.086067665
0.625162889
F
0.137672384
Significanr
F
0.711468432
CoeffzentXr
0.237159849
-3.428017651
SandardEwr
0.126582447
9.238886522
ISaW
1.873560311
-0.371042294
P-z'alu
0.064200434
0.711468432
LosJer9/5
-0.014280658
-21.77993263
Upper95%
0.488600355
14.92389733
The Correlation Between Market Fundamentals and Apartment REIT Performance
Loiar95.0%
-0.014280658
-21.77993263
Upper 95.0%
0.488600355
14.92389733
111
Appendix 12
Panel Data Results without Apartment Growth
% Change in Market Cap per Unit v. Weighted Average Rent Growth (Govt Data)
Regsersion Statits
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.059894539
0.003587356
-0.007608292
0.353461102
91
ANOVA
df
Regression
Residual
Total
1
89
90
Coeffiientr
Intercept
WARG
SS
0.04003211
11.11919281
11.15922492
StandardErvr
0.223472325
-2.880530302
0.173709915
5.088735011
MS
0.04003211
0.124934751
tStat
1.286468452
-0.566060189
F
0.320424138
P-valse
0.201616041
0.572777408
SiniFanaF
0.572777408
Lowr95%
-0.121685388
-12.9917329
Upper95%
0.568630039
.7.230672291
Lowar95.0%
-0.121685388
-12.9917329
Upper95.0%
0.568630039
7.230672291
%Change in Market Cap per Unit v. Weighted Average Rent Growth (NREI Data)
Rtrxssion Statirisr
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.490005653
0.24010554
0.2315674
0.308673006
91
ANOVA
df
Regression
Residual
Total
SS
1
89
90
Coefficnrs
Intercept
WARG
2.679391729
8.479833187
11.15922492
Standard Enrr
-0.414391089
13.8003871
0.10716994
2.602386597
MS
2.679391729
0.095279025
tStat
-3.86667277
5.302973477
F
28.1215277
P-valae
0.000209497
8.22903E-07
Sinifianrc F
8.22903E-07
Lower 95%
-0.627335362
8.629503168
Upper95%
-0.201446816
18.97127104
Loar95.0%
-0.627335362
8.629503168
Upper95.0%
-0.201446816
18.97127104
%Change in Market Cap per Unit v. Weighted Average Employment Growth
Rersfion Statirirc
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.065715223
0.004318491
-0.006868942
0.353331399
91
ANOVA
df
Regression
Residual
Total
SS
1
89
90
Coeffiecntr
Intercept
WAEG
0.047536617
2.562810612
0.048191007
11.11103391
11.15922492
StandardE"rr
0.13378029
4.12492203
MS
0.048191007
0.124843078
ISltat
0.355333488
0.621299165
F
0.386012652
P-value
0.723180518
0.535990906
SOnicanc F
0.535990906
Lo"wer
95%
-0.218281825
-5.633317157
Upper95%
0.313355059
10.75893838
The Correlation Between Market Fundamentals and Apartment REIT Performance
LoWr95.0%
-0.218281825
-5.633317157
Upper95.0%
0.313355059
10.75893838
112
Appendix 12
Panel Data Results without Apartment Growth
% Change in Market Cap per Unit v. Weighted Average Stock Growth
Rerssion Stater
0.153234478
Multiple R
0.023480805
R Square
0.01250868
Adjusted R Square
Standard Error
Observations
0.349914875
91
ANOVA
df
1
89
90
SS
0.262027588
10.89719733
11.15922492
MS
0.262027588
0.122440419
F
2.140041578
SiRnicance F
0.147020611
CoeffWentr
0.28816999
-7.731302289
StandardErrr
0.115855701
5.284958102
iStat
2.487318159
-1.462888095
P-value
0.01473506
0.147020611
Lorer 95%
0.057967304
-18.23239577
Regression
Residual
Total
Intercept
WASG
Upper95%
0.518372676
2.769791196
Loerr95.0%
0.057967304
-18.23239577
Uppr 95.0%
0.518372676
2.769791196
% Change in Market Cap per Unit v. Weighted Average Excess Demand
Ressrrion Statistics
Multiple R
0.184647847
R Square
0.034094827
Adjusted R Square
0.02324196
Standard Error
0.348008024
Observations
91
ANOVA
df
1
89
90
SS
0.380471846
10.77875307
11.15922492
MS
0.380471846
0.121109585
F
3.141550244
SiOnicane F
0.079743088
Coeffiernts
0.052529461
7.220162382
StandadErr
0.055816259
4.073567903
tStat
0.94111396
1.772441887
P-Vawle
0.349193907
0.079743088
Lowr 95%
-0.058376198
-0.873925885
Regression
Residual
Total
Intercept
WAED
Upper95/o
0.163435119
15.31425065
Lowr95.0%
-0.058376198
-0,873925885
Upper 95.0%
0.163435119
15.31425065
Loer95.0%
0.067033872
-0.639774935
Upper 95.0%
0.095561835
0.19593583
Cap Rate v. Weighted Average Rent Growth (Govt Data)
Regrersion Statiticr
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.111164828
0.012357619
0.001260514
0.014607127
91
ANOVA
df
Regression
Residual
Total
Intercept
WARG
1
89
90
SS
0.000237605
0.018989767
0.019227372
MS
0.000237605
0.000213368
F
1.113589397
SiniFncance F
0.294159271
Coefficenftr
0.081297853
-0.221919553
StandanrdErr
0.007178733
0.210296974
tStat
11.32481935
-1.055267453
P-value
6.16923B-19
0.294159271
Lowr 95%
0.067033872
-0.639774935
Upper95%
0.095561835
0.19593583
The Correlation Between Market Fundamentals and Apartment REIT Performance
113
Appendix 12
Panel Data Results without Apartment Growth
Cap Rate v. Weighted Average Rent Growth (NREI Data)
Rcrsimon Stnatstic
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.352740784
0.124426061
0.114588151
0.013753441
91
ANOVA
1
89
90
SS
0.002392386
0.016834985
0.019227372
Coefflient
0.09008621
-0.412371648
StandardEror
0.004775136
0.115953679
df
Regression
Residual
Total
Intercept
WARG
MS
0.002392386
0.000189157
tStat
18.86568637
-3.556348116
F
12.64761192
P-value
7.46225E-33
0.000605036
S~iniicanc F
0.000605036
Lower95%
0.080598123
-0.642769013
Upper95
0.099574298
-0.181974282
Lower95.0%
Upper95.0%/o
0.080598123
-0.642769013
0.099574298
-0.181974282
Upper95%
0.09672309
-0.056957279
Lower 95.0%
0.075252083
-0.718984774
Upper 95. 0%
0.09672309
-0.056957279
Upper95%
0.078719816
0.668682994
Lorr 95.0%
0.05949766
-0.2081689
Upper95.0%/
0.078719816
0.668682994
Cap Rate v. Weighted Average Employment Growth
eruession
Slatirtia
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.239665667
0.057439632
0,046849066
0.014269854
91
ANOVA
df
1
89
90
SS
0.001104413
0.018122958
0.019227372
MS
0.001104413
0.000203629
F
5.423660274
SInifcnce F
0.022130773
Coefficient
0.085987587
-0.387971027
StandadEror
0.005402931
0.166591583
Stat
15.91498809
-2.328875324
P-value
9.0624E-28
0.022130773
Lover 95%
0.075252083
-0.718984774
Regression
Residual
Total
Intercept
WAEG
Cap Rate v. Weighted Average Stock Growth
Regr.rion Statirtics
Multiple R
0.10994458
0.012087811
R Square
0.000987674
Adjusted R Square
0.014609122
Standard Error
Observations
91
ANOVA
df
Regression
Residual
Total
Intercept
WASG
1
89
90
SS
0.000232417
0.018994955
0.019227372
MS
0.000232417
0.000213426
1.088978525
SOniFanceF
0.299523882
Coeffmients.
0.069108738
0.230257047
StandardEror
0.004837034
0.220649665
tStat
14.28742052
1.043541339
P-value
9.25109E-25
0.299523882
Lower 95%
0.05949766
-0.2081689
F
The Correlation Between Market Fundamentals and Apartment REIT Performance
114
Appendix 12
Panel Data Results without Apartment Growth
Cap Rate v. Weighted Average Excess Demand
RIruion Stafirtwr
Multiple R
R Square
Adjusted R Square
0.325510351
0.105956988
0.095911561
Standard Error
0.013897739
Observations
91
ANOVA
df
Regression
Residual
Total
Intercept
WAED
SS
MS
F
Sinifcwan F
1
89
90
0.002037274
0.017190097
0.019227372
0.002037274
0.000193147
10.54778332
0.001641329
CoeffwentS
0.07937574
-0.528336317
Standard Eemr
0.002229029
0.16267839
St
Da
35.61001454
-3.247735106
P-alue
1.93834E-54
0.001641329
Lorr95%
0.07494671
-0.851574638
Upper 95%
0.083804769
-0.205097997
The Correlation Between Market Fundamentals and Apartment REIT Performance
Loaer95.0%/
0.07494671
-0.851574638
Upper95.0%
0.083804769
-0.205097997
115
Appendix 13
Panel Data Results
% Change in FFO per Unit v. WARG (Govt), % Change in # of Apts
RerMssin Statutics
0.48093192
Multiple R
0.231295512
R Square
0.214400908
Adjusted K Square
0.271210019
Standard Error
Observations
94
ANOVA
df
2
91
93
Regression
Residual
Total
Coefficientr
Intercept
Govt WARG
%D # of Apts
SS
2.014005434
6.693493557
8.707498991
Standard Enr
0.168269944
0.386738625
-0.285606814
0.132818363
3.851150199
0.054604681
MS
1.007002717
0.073554874
tStat
1.266917766
0,10042159
-5.230445579
F
13.69049607
P-lcue
0.208417612
0.920230545
1.07371E-06
Sinecance F
6.33948E-06
Lower95%
-0.095557445
-7.263098925
-0.394072316
Upper 95%
0.432097334
8.036576175
-0.177141311
Lower95.0%
-0.095557445
-7.263098925
-0.394072316
Upper 95.0%
0.432097334
8.036576175
-0.177141311
%Change in FFO per Unit v. WARG (Govt), % Change in # of Apts, %in MSA
Reeomsion Statisti
0.482364534
Multiple R
0.232675543
R Square
0.207098061
Adjusted R Square
Standard Error
0.272467673
Observations
94
ANOVA
df
3
90
93
Regression
Residual
Total
Coeffcsents
Intercept
Govt WARG
%D # ofApts
%Total in MSA
SS
2.026022059
6.681476932
8.707498991
StandardEvr
0.219853332
0.55191972
-0.291217725
-0.068761794
0.185049705
3.890731793
0.056602881
0.170911362
MS
0.675340686
0.074238633
tStat
1.18807718
0.14185499
-5.144927617
-0.4023243
F
9.096890161
P-Value
0.237928823
0.88751161
1.55512E-06
0.688399321
SinificaneF
2.54039E-05
Lower95%
-0.14777991
-7.177691856
-0.403669137
-0.408306772
Upper95%
0.587486574
8.281531295
-0.178766313
0.270783184
Lowr95.0%
-0.14777991
-7.177691856
-0.403669137
-0.408306772
Upper95.0%
0.587486574
8.281531295
-0.178766313
0.270783184
%Change in FFO per Unit v. WARG (NREI), %Change in # of Apts
RtsOn Staistirs
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.609000884
0.370882076
0.357055309
0.245353382
94
ANOVA
2
91
93
SS
3.229455305
5.478043686
8.707498991
MS
1.614727653
0.060198282
F
26.82348386
Signiancea F
6.95518E-10
Ceffiientr
-0.171119462
9.219180468
-0.319535469
StandardEmr
0.08327293
2.05108359
0.049967848
I Stat
-2.054923033
4.494785347
-6.394821505
P-value
0.042753233
2.04482E-05
6.78966E-09
Lower 95%
-0.336530925
5.144954469
-0.418790471
df
Regression
Residual
Total
Intercept
NREI WARG
%D # of Apts
Upper95%
-0.005707999
13.29340647
-0.220280467
The Correlation Between Market Fundamentals and Apartment REIT Performance
Lower95.0%
-0.336530925
5.144954469
-0.418790471
Upper950%
-0.005707999
13.29340647
-0.220280467
116
Appendix 13
Panel Data Results
% Change in FFO per Unit v. WARG (NREI), % Change in # of Apts, %in MSA
Regrwion Statistis
Multiple R
0.609824364
0.371885755
R Square
Adjusted R Square
0.350948613
Standard Error
0.246515813
Observations
94
ANOVA
SS
df
Regression
Residual
Total
Intercept
NREI WARG
%D # of Apts
%Total in MSA
Ss
MS
F
Sinifrancn
F
k~~~~~~~~~~~~~inificanot
3
90
93
3.238194833
5.469304158
8.707498991
1.079398278
0.060770046
17.7620118
3.86691E-09
Coeffoaients
-0.225817183
9.361885466
-0.315202472
0.059277606
StandardError
0.166745071
2.094876355
0.051488356
0.156311688
t Stat
-1.354266018
4.468944166
-6.121820465
0.379226955
P-sare
0.179042033
2.28128E-05
2.37293E-08
0.705412596
Lowr 95%
-0.557085102
5.200051295
-0.417492995
-0.251262596
Upper95%
0.105450737
13.52371964
-0.212911948
0.369817807
Lower95.0%
-0,557085102
5.200051295
-0.417492995
-0.251262596
Upper95.0/
0.105450737
13.52371964
-0.212911948
0.369817807
% Change in FFO per Unit v. WAEG, WASG, % Change in # of Apts
Regrsson Statrtics
Multiple R
0.517045731
R Square
0.267336288
Adjusted R Square
0.242914165
Standard Error
0.266242757
Observations
94
ANOVA
df
Regression
Residual
Total
Intercept
WAEG
WASG
%D # of Apts
SS
MS
F
Signifcance F
3
90
93
2.327830462
6.379668529
8.707498991
0.775943487
0.070885206
10.94647998
3.38301E-06
Coeffzaclts
0.153434738
6.064926759
-7.589092059
-0.300697858
StandardError
0.114217594
3,376533686
4,411305147
0.054308329
tStat
1.34335466
1.796199097
-1.720373405
-5.536864495
P.-value
0.182534681
0.075818211
0.088801221
3.01495E-07
LoWer95%
-0.073478266
-0.643141352
-16.35291263
-0.408590746
Upper95%
0.380347742
12.77299487
1.174728515
-0.192804971
Loer 95.0%
-0.073478266
-0.643141352
-16.35291263
-0.408590746
Upper95.0%
0.380347742
12.77299487
1,174728515
-0.192804971
Loer 95.0%
0.030517231
0.315471151
-0.405222452
Upper95 0%
0.202702519
12.69544387
-0.191889719
% Change in FFO per Unit v. WAED, % Change in # of Apts
Rersion Statirtics
Multiple R
0.516087308
R Square
0.266346109
Adjusted R Square
0.250221848
Standard Error
0.264954703
Observations
94
ANOVA
df
Regression
Residual
Total
Intercept
WAED
%D # ofApts
SS
MS
F
Sienifiance F
2
91
93
2.319208475
6.388290516
8.707498991
1.159604238
0.070200995
16.51834483
7.58317E-07
Coefftcierti
0.116609875
6.505457509
-0.298556085
StandardErrr
0.043341535
3.116218748
0.053698944
t Stat
2.690487892
2.087612595
-5.559812975
P-Malue
0.008488934
0.039627788
2.67743E-07
Loaer95%
0.030517231
0.315471151
-0.405222452
Upper95%
0.202702519
12.69544387
-0.191889719
The Correlation Between Market Fundamentals and Apartment REIT Performance
117
Appendix 13
Panel Data Results
%Change in FFO per Unit v. WARG (Govt), WAEG, WASG, %Change in # of Apts
ReMsrion Statlrtias
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.519771761
0.270162684
0.237361007
0.267217407
94
ANOVA
df
Regression
Residual
Total
SS
4
89
93
Coeffeienx
Intercept
Govt WARG
WAEG
WASG
%D # of Apts
2.352441298
6.355057693
8.707498991
Standardar
for
0.224421194
-2.353873163
6.713165449
-8.166658258
-0.30217881
0.16661805
4.009448313
3.564238977
4.535437636
0.054565479
MS
0.588110324
0.071405143
tSa
1.346920059
-0.587081558
1.88347793
-1.800632908
-5.537911817
F
8.236246059
P-value
0.181425705
0.558635317
0.062901153
0.075148178
3.06562E-07
Significanc F
1.0672E-05
Lower 95%
-0.106645143
-10.32055724
-0.368897639
-17.17847135
-0.410599195
Upper 95%
0.555487531
5.612810912
13.79522854
0.845154832
-0.193758424
Lowe
r95.5.0%
-0.106645143
-10.32055724
-0.368897639
-17.17847135
-0.410599195
0.555487531
5.612810912
13.79522854
0.845154832
-0.193758424
%Change in FFO per Unit v. WARG (NREI), WAEG, WASG, %Change in # of Apts, % in MSA
ReRrresion
Statirts
0.519965261
Multiple R
0.270363872
R Square
Adjusted R Square
0.228907274
0.268694357
Standard Error
Observations
94
ANOVA
df
Regression
Residual
Total
SS
5
88
93
Coeffments
2.354193145
6.353305846
8.707498991
Standard iEr
MS
0.470838629
0.072196657
tSat
F
6.521612583
P-valrie
Significancn F
3.33279E-05
Lower95%
Upper95%
Lower 95.0%
Upper95.0%
Intercept
Govt WARG
WAEG
WASG
0.236556717
-2.276284708
6.861115981
-7.732007623
0.184766332
4.062261126
3.707656627
5.346398957
1.280302064
-0.560349184
1.850526268
-1.446208501
0.203803444
0.57666509
0.067593052
0.151671098
-0.130627826
-10.3491813
-0.50707814
-18.35686028
0.60374126
5.796611886
14.2293101
2.892845035
-0.130627826
-10.3491813
-0.50707814
-18.35686028
0.60374126
5.796611886
14.2293101
2.892845035
%D # of Apts
%Total in MSA
-0.304130632
-0.03443998
0.056279624
0.221092168
-5.403920833
-0.15577205
5.50494E-07
0.876569477
-0.415974645
-0.473814545
-0.19228662
0.404934584
-0.415974645
-0.473814545
-0.19228662
0.404934584
%Change in FFO per Unit v. WARG (NREI), WAEG, WASG, %Change in # of Apts
Rtreszon Stas:tics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.643937156
0.414655061
0.388347424
0.239308237
94
ANOVA
df
Regression
Residual
Total
SS
4
89
93
Coeffsicntr
Intercept
NREI WARG
WAEG
WASG
%D # of Apts
-0.495961528
10.97774262
6.822002339
2.09593434
-0.321877929
3.610608529
5.096890462
8.707498991
StandardEror
0.17136725
2.319502944
3.039158435
4.461961296
0.049018919
MS
0.902652132
0.057268432
tStat
-2.89414417
4.732799605
2.244701119
0.469733868
-6.566402022
F
15.76177482
P-alse
0.004780869
8.29177E-06
0.027266035
0.639694053
3.34904E-09
SiRnifran F
8.68552E-10
Lower95%
-0.83646442
6.368942172
0.783262537
-6.769882907
-0.419277424
Upper95%
-0.155458637
15.58654306
12.86074214
10.96175159
-0.224478434
The Correlation Between Market Fundamentals and Apartment REIT Performance
Lower 95.0%
-0.83646442
6.368942172
0.783262537
-6.769882907
-0.419277424
Upper95.0%
-0.155458637
15.58654306
12.86074214
10.96175159
-0.224478434
118
Appendix 13
Panel Data Results
% Change in FFO per Unit v. WARG (NREI), WAEG, WASG, %Change in # of Apts, %in MSA
ReRsion Stamirtr
Multiple R
0.651675271
R Square
0.424680659
0.39199206
Adjusted R Square
Standard Error
0.238594192
Observations
94
ANOVA
df
5
88
93
SS
3.697906412
5.009592579
8.707498991
MS
0.739581282
0.056927188
F
12.99170578
Caeflerent
-0.427329641
11.56792106
8.073856409
5.589548542
-0.337327425
-0.246353741
StandardE r
0.179620073
2.361179788
3.194273344
5.267789152
0.050439915
0.198937736
tStat
-2.379075087
4.899212302
2.527603476
1.061080537
-6.687708075
-1.238345953
P-svalue
0.019517894
4.34513E-06
0.013269833
0.29155679
2.00856E-09
0.218881158
Regression
Residual
Total
Intercept
NREI WARG
WAEG
WASG
%D # of Apts
%Total in MSA
S
-nifiwcna
F
1.8085E-09
Loair95%
-0.784287068
6.875568783
1.725904469
-4.879083527
-0.437566233
-0.641700993
Upper95%
-0.070372215
16.26027335
14.42180835
16.05818061
-0.237088616
0.148993511
0
Loawr95.0/
-0.784287068
6.875568783
1.725904469
-4.879083527
-0.437566233
-0.641700993
Upper95,0%
-0.070372215
16.26027335
14.42180835
16.05818061
-0.237088616
0.148993511
% Change in Rental Revenue per Unit v. WARG (Govt), %Change in # of Apts
Rctsivn Statirtict
Multiple R
0.456155107
0.208077482
R Square
Adjusted R Square
0.190672591
Standard Error
0.264942101
Observations
94
ANOVA
2
91
93
SS
1.678362381
6.387682854
8.066045235
MS
0.839181191
0.070194317
F
11.95511582
Coeffictnr
0.071104609
3.211946457
-0.256357803
StandardError
0.129748807
3.762146514
0.053342716
t Stat
0.548017439
0.853753687
-4.805863329
P-valwe
0.585021737
0.395483292
6.05084E-06
df
Regression
Residual
Total
Intercept
Govt WARG
%D #of Apts
Sifwance F
2.45506E-05
95%ULouwer95.0%
Lawr
0.3288347
-0.186625483
-4.261096188
10.6849891
-0.362316566
-0.15039904
-0.186625483
-4.261096188
-0.362316566
Upper 95.0%
0.3288347
10.6849891
-0.15039904
% Change in Rental Revenue per Unit v. WARG (Govt), %Change in # of Apts, %in MSA
Rirxrion Statirtic
0.472350075
Multiple R
R Square
0.223114593
0.197218413
Adjusted R Square
0.263868503
Standard Error
Observations
94
ANOVA
3
90
93
SS
1.799652404
6.266392832
8.066045235
MS
0.599884135
0.069626587
F
8.615733734
SiO
niasceF
4.35093E-05
Coeffirientr
0.23498657
3.736731722
-0.274183835
-0.21845827
StandardErrr
0.179209476
3.767939019
0.054816475
0.165517343
tStat
1.311239647
0.991717675
-5.001850867
-1.319851238
P-vmale
0.193112368
0.323994093
2.79015E-06
0.190232041
Lower95%
-0.121044047
-3.748930773
-0.383086243
-0.547287097
df
Regression
Residual
Total
Intercept
Govt WARG
%D # of Apts
%Total in MSA
Upper95%
0.591017186
11.22239422
-0.165281426
0.110370557
The Correlation Between Market Fundamentals and Apartment REIT Performance
Lowr950%
-0.121044047
-3.748930773
-0.383086243
-0.547287097
Upper9.0%
0.591017186
11.22239422
-0.165281426
0.110370557
119
Appendix 13
Panel Data Results
%Change in Rental Revenue per Unit v. WARG (NREI), % Change in # of Apts
R4Rnmnn Staftitrs
Multiple R
0.566517557
R Square
0.320942143
Adjusted R Square
0.306017794
Standard Error
0.245336983
Observations
94
ANOVA
df
Regression
Residual
Total
Intercept
NREI WARG
%D # of Apts
SS
MS
F
Snifignance F
2
91
93
2.588733839
5.477311396
8.066045235
1.29436692
0.060190235
21.50459983
2.2478B-08
Ceefficnt
-0.134494867
8.197360469
-0.286935222
Standarmd rro
0.083267364
2.050946494
0.049964508
tStat
-1.615217059
3.996867053
-5.742780888
P-value
0.109725752
0.000130238
1.21808E-07
Lanaer95%
-0.299895274
4.123406795
-0.38618359
Upper 95%
0.03090554
12.27131414
-0.187686855
Loawr95.o
95./o
Upper
.
-0.299895274
0.03090554
4.123406795
12.27131414
-0.38618359
-0.187686855
% Change in Rental Revenue per Unit v. WARG (NREI), % Change in # of Apts, % in MSA
Reiasen Statitir
Multiple R
0.56893285
R Square
0.323684588
Adjusted R Square
0.301140741
Standard Error
0.246197543
Observations
94
ANOVA
df
Regression
Residual
Total
3
90
93
Coefficients
SS
2.610854529
5.455190706
8.066045235
StandardE
r
MS
0.870284843
0.06061323
I Stat
F
14.35800141
P-value
Sinfcane F
1.00922E-07
Intercept
NREI WARG
-0.047473766
7.970324572
0.16652979
2.092171712
-0.285076719
3.809593891
0.776240357
0.000254111
Lvwer95%
-0.378313994
3.813863643
Upper95%
0.283366462
12.1267855
Lower 95.0%
-0.378313994
3.813863643
Upper95.0%
0.283366462
12.1267855
%D # of Apts
%Total in MSA
-0.293828786
-0.094307449
0.051421881
0.156109878
-5.714080888
-0.604109429
1.41119E-07
0.547290698
-0.395987245
-0.40444672
-0.191670327
0.215831821
-0.395987245
-0.40444672
-0.191670327
0.215831821
%Change in Rental Revenue per Unit v. WAEG, WASG, %Change in # of Apts
R eysson Stalirics
0.495503148
Multiple R
R Square
0.24552337
0.220374148
Adjusted R Square
Standard Error
0.260035097
Observations
94
ANOVA
df
Regression
Residual
Total
Intercept
WAEG
WASG
%D # of Apts
3
90
93
SS
1.980402605
6.08564263
8.066045235
MS
0.660134202
0.067618251
F
9.762663001
SjnifcanewF
1.21789E-05
Ceffsient
0.228474773
4.840146013
-9.431668777
-0.275491938
StandardError
0.111554521
3.297807127
4.308452072
0.053042087
tSta
2.048099633
1.4676862
-2.189108436
-5.193836681
P-value
0.043463913
0.145675609
0.031176579
1.27113E-06
Lowr 95%
0.006852425
-1.711518174
-17.99115393
-0.380869217
Upper 95%
0.45009712
11.3918102
-0.872183624
-0.170114659
The Correlation Between Market Fundamentals and Apartment REIT Performance
Lowr95.0%
0.006852425
-1.711518174
-17.99115393
-0.380869217
Upper95,0%
0.45009712
11.3918102
-0.872183624
-0.170114659
120
Appendix 13
Panel Data Results
%Change in Rental Revenue per Unit v. WAED, % Change in # of Apts
Ragmsion Statuits
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.485615925
0.235822827
0.219027724
0.260259542
94
ANOVA
df
SS
2
91
93
Regression
Residual
Total
Cocfficns
Intercept
WAED
%D # of Apts
1.902157586
6.163887649
8.066045235
StandardEn
0.117540483
6.167237613
-0.269039883
0.042573496
3.060997424
0.052747365
MS
0.951078793
0.067735029
t Stat
2.760883966
2.014780399
-5.100536886
F
14.04116608
P-vale
0.006971971
0.046879037
1.83651E-06
Si£nifancr F
4.8454E-06
Lonr95%
0.032973454
0.086941642
-0.373816055
Upper95%
Lo)e r 95.0%
0.202107511
12.24753358
-0.164263711
0.032973454
0.086941642
-0.373816055
Upper95.0%
0.202107511
12.24753358
-0.164263711
% Change in NOI per Unit v. WARG (Govt), %Change in # of Apts
RParsionStatutrex
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.462918193
0.214293253
0.197024973
0.263615731
94
ANOVA
df
Regression
Residual
Total
SS
2
91
93
Coeffscntr
Intercept
Govt WARG
%D #ofApts
1.724773429
6.323886078
8.048659507
Standard Errr
0.091540666
3.048631947
-0.260412086
0.12909925
3.743312211
0.053075668
MS
0.862386715
0.069493254
t Stat
0.70907202
0.814420966
-4.906430667
F
12.40964655
P-vale
0.480092494
0.41753001
4.04444E-06
Sginifcanc F
1.71535E-05
Loar 95%
-0.164899161
-4.386998665
-0.365840392
Upper95%
0.347980492
10.48426256
-0.154983781
Lower 95.0%
-0.164899161
-4.386998665
-0.365840392
Upper95.0%/o
0.347980492
10.48426256
-0.154983781
% Change in NOI per Unit v. WARG (Govt), %Change in # of Apts, % in MSA
Reession Sttistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.475681881
0.226273251
0.20048236
0.263047591
94
ANOVA
df
Regression
Residual
Total
SS
3
90
93
Coeffcients
Intercept
Govt WARG
%D # of Apts
%Total in MSA
0.237660366
3.516538633
-0.276306053
-0.194780784
1.821196357
6.227463151
8.048659507
StandardEmrr
0.178651943
3.756216709
0.054645938
0.165002408
MS
0.607065452
0.069194035
tStat
1.330298241
0.936191627
-5.056296314
-1.180472376
F
8.773378402
P-vale
0.186781154
0.351679867
2.23583E-06
0.240922897
Signifcanc F
3.64542E-05
Lowr95%
-0.117262616
-3.945835466
-0.384869659
-0.522586603
Upper95%
0.592583347
10.97891273
-0.167742447
0.133025034
The Correlation Between Market Fundamentals and Apartment REIT Performance
Lowr95,0%
-0.117262616
-3.945835466
-0.384869659
-0.522586603
Upper 95.0%
0.592583347
10.97891273
-0.167742447
0.133025034
121
Appendix 13
Panel Data Results
%Change in NOI per Unit v. WARG (NREI), %Change in # of Apts
Re, rMiWn
Shtirta
Multiple R
0.558184621
R Square
0.311570071
Adjusted R Square
0.296439743
Standard Error
0.246757836
Observations
94
ANOVA
df
2
91
93
SS
2.507721418
5.540938089
8.048659507
MS
1.253860709
0.06088943
F
20.59242004
Siniana F
4.1939E-08
Coeffcntr
-0.09714968
7.611661506
-0.288814202
StandaidEramr
0.083749602
2.062824416
0.050253874
IStat
-1.160001699
3.68992215
-5.747103211
P-valee
0.24908253
0.000381715
1.19547E-07
Lower9
-0.263507993
3.514113796
-0.38863736
Regression
Residual
Total
Intercept
NREI WARG
%D # of Apts
Uppe95%
0.069208632
11.70920922
-0.188991044
L
%
-0.263507993
3.514113796
-0.38863736
Uer 95 .0%
0.069208632
11.70920922
-0.188991044
% Change in NOI per Unit v. WARG (NREI), %Change in # of Apts, %in MSA
Re-sion Stairtiax
Multiple R
0.55990982
R Square
0.313499007
Adjusted R Square
0.290615641
Standard Error
0.247777067
Observations
94
ANOVA
df
Regression
Residual
Total
3
90
93
Coeffients
Intercept
NREI WARG
%D # of Apts
%Total in MSA
SS
2.523246764
5.525412744
8.048659507
StandardErrvr
-0.0242466
7.421459175
-0.294589376
-0.079007315
0.167598192
2.1055944i2
0.051751787
0.157111429
MS
0.841082255
0.061393475
t Stat
-0.14467101
3.524638521
-5.692351779
-0.502874399
F
13.69986396
P-value
0.88529411
0.000669006
1.54969E-07
0.616280979
SIni*an F
1.94814E-07
Lomre 9595/
5
-0.357209392
3.23833173
-0.397403251
-0.39113634
Upper
Loser 95. 0/
0.308716193
11.60458662
-0.191775502
0.233121709
Upper95. 0%
-0.357209392
3.23833173
-0.397403251
-0.39113634
0.308716193
11.60458662
-0.191775502
0.233121709
Loaer95.0%
-0.011640476
-1.171701797
-17.11646872
-0.38287783
Upper95.0%
0.430129752
11.88803794
-0.054445209
-0.172824353
% Change in NOI per Unit v. WAEG, WASG, %Change in # of Apts
Re.rrsion Statirtict
Multiple R
0.49891452
R Square
0.248915698
Adjusted R Square
0.223879555
Standard Error
0.259170082
Observations
94
ANOVA
df
Regression
Residual
Total
Intercept
WAEG
WASG
%D # of Apts
3
90
93
SS
2.003437702
6.045221806
8.048659507
MS
0.667812567
0.067169131
F
9.942254062
Sknifwnc F
1.00064E-05
Coeffirents
0.209244638
5.358168071
-8.585456962
-0.277851091
StandadE r
0.111183431
3.286836867
4.29411987
0.052865641
IStat
1.881976804
1.630189841
-1.999351956
-5.25579726
P-valuc
0.063070765
0.106556413
0.048586303
9.83289E-07
Lorr 95%
-0.011640476
-1.171701797
-17.11646872
-0.38287783
Upper 95%
0.430129752
11.88803794
-0.054445209
-0.172824353
The Correlation Between Market Fundamentals and Apartment REIT Performance
122
Appendix 13
Panel Data Results
% Change in NOI per Unit v. WAED, % Change in # of Apts
Reresrion Statirtics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.494077817
0.244112889
0.227499985
0.258564889
94
ANOVA
df
2
91
93
SS
1.964781525
6.083877982
8.048659507
MS
0.982390762
0.066855802
F
14.69417362
Sinicane F
2.94979E-06
Coeffients
0.13127116
6.290954033
-0.273316072
StandardEr
0.042296283
3.041066064
0.052403907
tStat
3.103609806
2.068667336
-5.215566731
P-vale
0.002547457
0.041414218
1.14216E-06
Lower 95%
Regression
Residual
Total
Intercept
WAED
%D #ofApts
0.04725478
0.250249267
-0.377410005
Upper95%
0.215287539
12.3316588
-0.169222138
Lower95.0%
0.04725478
0.250249267
-0.377410005
Upper95.0%
0.215287539
12.3316588
-0.169222138
%Change in NOI per Unit v. WARG (Govt), WAEG, WASG, %Change in # of Apts
Rcnsrion Statitics
Multiple R
0.499228891
R Square
0.249229486
Adjusted R Square
0.215486991
Standard Error
0.260567579
Observations
94
ANOVA
df
4
89
93
SS
2.00596327
6.042696237
8.048659507
MS
0.501490818
0.067895463
F
7.386219829
Sifnifw-n F
3.48757E-05
Ceffsentr
0.186504563
0.754048813
5.150508788
-8.400437177
-0.277376677
StandardErr
0.162471683
3.909671351
3.475541254
4.422571188
0.053207592
tStat
1.147920418
0.19286757
1.481929982
-1.899446458
-5.213103393
. P-vale
0.25407762
0.847502122
0.141891036
0.060744531
1.19437E-06
Lower95%
-0.136323036
-7.014380673
-1.75531391
-17.18798716
-0.383098972
Regression
Residual
Total
Intercept
Govt WARG
WAEG
WASG
%D #ofApts
Upper95%
0.509332162
8.522478299
12.05633148
0.387112808
-0.171654383
Lower 95.0%
-0.136323036
-7.014380673
-1.75531391
-17.18798716
-0.383098972
Upper95.0%
0.509332162
8.522478299
12.05633148
0.387112808
-0.171654383
%Change in NOI per Unit v. WARG (NREI), WAEG, WASG, %Change in # of Apts
Remtesion Statistics
Multiple R
0.582775772
R Square
0.339627601
Adjusted R Square
0.309947942
Standard Error
0.244377507
Observations
94
ANOVA
df
Regression
Residual
Total
Intercept
NREI WARG
WAEG
WASG
%D# ofApts
4
89
93
SS
2.733546919
5.315112589
8.048659507
MS
0.68338673
0.059720366
F
11.44311017
Sinitanc F
1.54097E-07
Coeffintr
-0.280678488
8.281923159
5.929327553
-1.278795909
-0.293829943
Standard Errvr
0.174997326
2.368637017
3.103536984
4.556479104
0.050057288
I Stat
-1.60390158
3.496493172
1.910506491
-0.2806544
-5.869873423
P-vale
0.112278803
0.000737587
0.059287623
0.779626859
7.36604E-08
Louer 95%
-0.628394258
3.57549441
-0.237330986
-10.33241793
-0.393292653
Upper95%
0.067037283
12.98835191
12.09598609
7.774826108
-0.194367232
The Correlation Between Market Fundamentals and Apartment REIT Performance
Lowr 950%
-0.628394258
3.57549441
-0.237330986
-10.33241793
-0.393292653
Upper 95.0%
0.067037283
12.98835191
12.09598609
7.774826108
-0.194367232
123
Appendix 13
Panel Data Results
% Change in N.I. per Unit v. WARG (Govt), % Change in # of Apts
Retsmiion Stattic
Multiple R
0.284662581
R Square
0.081032785
Adjusted R Square
0.060611292
Standard Error
0.762736123
Observations
93
ANOVA
df
Regression
Residual
Total
2
90
92
Coeffient
Intercept
Govt WARG
%D # Apts
SS
4.616915106
52.35897546
56.97589057
MS
2.308457553
0.581766394
0.373565581
10.83240791
0.154118634
2.145931574
-1.392240789
-2.460839175
S
0.801646175
-15.08132014
-0.379261172
tStat
F
3.968014613
P-ale
0.034569701
0.167280093
0.015769403
Srnfiwnar F
0.022310063
Lowr 95%
0.059493544
-36.60177183
-0.685444491
Upper95%
Lor95.0%
1.543798806
6.439131553
-0.073077852
0.059493544
-36.60177183
-0.685444491
Upper95.0%
1.543798806
6.439131553
-0.073077852
% Change in N.I. per Unit v. WARG (Govt), % Change in # of Apts, %in MSA
Rovnsirrn Statis
Multiple R
0.311739907
R Square
0.09718177
Adjusted R Square
0.066749694
Standard Error
0.760240003
Observations
93
ANOVA
df
Regression
Residual
Total
Intercept
Govt WARG
%D # Apts
%Total in MSA
3
89
92
Coeffints
0.348778534
-16.51048694
-0.331520359
0.604507195
SS
5.537017869
51.4388727
56.97589057
MS
1.845672623
0.577964862
F
3.193399366
StandardEnr
0.517171716
10.85621079
t Stat
0.674395995
-1.520833305
0.501807599
0.131846633
'0.678830093
-38.08153485
1.376387161
5.060560965
-0.678830093
-38.08153485
1.376387161
5.060560965
0.158205622
0.479108664
-2.09550302
1.261732964
0.038966492
0.210341671
-0.645871391
-0.347471
-0.017169328
1.55648539
-0.645871391
-0.347471
-0.017169328
1.55648539
Louwr 95,0%
-0.612711252
-2.806497291
-0.719158757
Upper 95.0%
0.434252594
22.82035925
-0.102422611
P-value
Signifwan- F
0.027370663
Loaer 95%
Upper95%
Lower 95.0%
Upper95.0%
%Change in N.I. per Unit v. WARG (NREI), %Change in # of Apts
ReResjion Statistis
Multiple R
0.292739102
R Square
0.085696182
Adjusted R Square
0.065378319
Standard Error
0.760798369
Observations
93
ANOVA
df
Regression
Residual
Total
Intercept
NREI WARG
%D # Apts
2
90
92
SS
4.882616274
52.0932743
56.97589057
MS
2.441308137
0.578814159
F
4.217775429
Sinifwn- F
0.017744918
Coefficients
-0.089229329
10.00693098
-0.410790684
StandardErr
0.26349678
6.449691844
0.155218338
t Stat
-0.338635368
1.551536293
-2.646534478
P-value
0.735673201
0.124282749
0.009599047
Lowr 95%
-0.612711252
-2.806497291
-0.719158757
Upper95%
0.434252594
22.82035925
-0.102422611
The Correlation Between Market Fundamentals and Apartment REIT Performance
124
Appendix 13
Panel Data Results
% Change in N.I. per Unit v. WARG (NREI), % Change in # of Apts, % in MSA
Ression Statidis
0.324361935
Multiple R
0.105210665
R Square
0.075049226
Adjusted R Square
Standard Error
0.75685199
Observations
93
ANOVA
df
3
89
92
Regression
Residual
Total
Coff
Intercept
NREI WARG
%D # Apts
%Total in MSA
SS
5.994471321
50.98141925
56.97589057
Snd
ssd
ntr
-0.70259208
11.51636759
-0.362697913
0.670247843
0.512383223
6.507066434
0.15822466
0.481085532
MS
1.998157107
0.572824935
Stat
-1.371223818
1.769824806
-2.29229699
1.393198918
F
3.488250918
P-vale
0.173752795
0.080181188
0.024246814
0.167029603
Sinificana F
0.019007536
Loer95%
-1.720686079
-1.413027805
-0.677086772
-0.285658344
Upper95%
0.315501919
24.44576298
-0.048309053
1.62615403
Lower 95.0%
-1.720686079
-1.413027805
-0.677086772
-0.285658344
Upper9.0%
0.315501919
24.44576298
-0.048309053
1.62615403
% Change in N.I. per Unit v. WAEG, WASG, % Change in # of Apts
Ression Statisicr
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.270225609
0.07302188
0.041775426
0.770345056
93
ANOVA
3
89
92
SS
4.16048663
52.81540394
56.97589057
MS
1.386828877
0.593431505
F
2.33696537
SiOnifmac F
0.07904243
Cooffsentfs
-0.017450519
2.919357936
10.48385163
-0.357484294
StandardErrr
0.330511824
9.77066916
12.77597571
0.157599922
t Stat
-0.05279847
0.298787922
0.820591074
-2.268302482
P-valse
0.95801081
0.765798402
0.41407171
0.025729948
Lower95%
-0.674170117
-16.49474304
-14.90172621
-0.670631813
df
Regression
Residual
Total
Intercept
WAEG
WASG
%D # Apts
Upper 95%
0.63926908
22.33345891
35.86942947
-0.044336776
Loner95.0%
-0.674170117
-16.49474304
-14.90172621
-0.670631813
Upper95.0%
0.63926908
22.33345891
35.86942947
-0.044336776
Loner95.0%
0.053993066
-18.96320318
-0.687015257
Upper 95.0%
0.557339464
17.06125511
-0.064085086
% Change in N.I. per Unit v. WAED, % Change in # of Apts
Rerssion Statirties
0.247700793
Multiple R
0.061355683
R Square
0.04049692
Adjusted R Square
Standard Error
0.770858799
Observations
93
ANOVA
2
90
92
SS
3.495794679
53.48009589
56.97589057
MS
1.74789734
0.594223288
F
2.941482396
StiniFRancF
0.057882526
Coeffientsr
0.305666265
-0.950974032
-0.375550171
StandasEdr
0.126680741
9.066529657
0.156777232
IStat
2.41288663
-0.104888427
-2.395438202
P-lc
0.017854518
0.916697748
0.018672124
Loner 95%
0.053993066
-18.96320318
-0.687015257
df
Regression
Residual
Total
Intercept
WAED
%D #Apts
Upper 95%
0.557339464
17.06125511
-0.064085086
The Correlation Between Market Fundamentals and Apartment REIT Performance
125
Appendix 13
Panel Data Results
% Change in N.I. per Unit v. WARG (Govt), WAEG, WASG, %Change in # of Apts
RegrrionStatitir
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.308032069
0.094883755
0.053742108
0.765519759
93
ANOVA
df
4
88
92
SS
5.40608647
51.5698041
56.97589057
MS
1.351521617
0.586020501
F
2.306270198
Sirnifwance F
0.064400989
Coeffient-r
0.487789421
-16.74902059
7.527960758
6.358535096
-0.367685177
StandErr
0.477462202
11.48832067
10.21108363
13.00744955
0.156768966
I Stat
1.021629394
-1.457917225.
0.737234267
0.48883796
-2.345395187
P-valse
0.309756716
0.148423039
0.462941052
0.626172515
0.021255556
Laxer 95%
-0.461067107
-39.57966143
-12.76443791
-19.4910575
-0.679230794
Regression
Residual
Total
Intercept
Govt WARG
WAEG
WASG
%D # Apts
Upper 95%
1.436645948
6.081620255
27.82035943
32.20812769
-0.056139561
0
Lower95.0 /o
-0.461067107
-39.57966143
-12.76443791
-19.4910575
-0.679230794
Upper95.00%
1.436645948
6.081620255
27.82035943
32.20812769
-0.056139561
% Change in N.I. per Unit v. WARG (Govt), WAEG, WASG, % Change in # of Apts, % in MSA
RcrtWnen Statirticr
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.316705279
0.100302234
0.048595465
0.767598745
93
ANOVA
df
5
87
92
SS
5.714809081
51.26108149
56.97589057
MS
1.142961816
0.589207833
F
1.939827938
Sinificanr F
0.095832298
Coefficint
0.325517215
-17.76950716
-0.605635836
6.167958617
-0.342379154
0.458639346
Standard Ervr
0.528645553
11.60546794
15.27345928
16.52446567
0.161035383
0.633609011
IStat
0.615757029
-1.531132329
-0.039652827
0.373262212
-2.126111346
0.723852309
P-value
0.539662493
0.129364941
0.968460764
0.709861247
0.036327081
0.471098331
Lwr95V%
-0.725223826
-40.83664806
-30.96331199
-26.67622999
-0.662454647
-0.800728085
Regression
Residual
Total
Intercept
Govt WARG
WAED
WAEG
%D # Apts
%Total in MSA
Upper 95%
1.376258256
5.297633739
29.75204031
39.01214723
-0.022303662
1.718006776
La r95.0%
-0.725223826
-40.83664806
-30.96331199
-26.67622999
-0.662454647
-0.800728085
Upper95.0%
1.376258256
5.297633739
29.75204031
39.01214723
-0.022303662
1.718006776
% Change in N.I. per Unit v. WARG (NREI), WAEG, WASG, %Change in # of Apts
R.r.rsion Staitic
Multiple R
0.363660325
R Square
0.132248832
Adjusted R Square
0.092805597
Standard Error
0.749552105
Observations
93
ANOVA
d¥
Regression
Residual
Total
Intercept
NREI WARG
WAEG
WASG
%D # Apts
4
88
92
SS
7.534994994
49.44089558
56.97589057
MS
1.883748748
0,561828359
F
3.352890111
Sinian-e~ F
0.013277201
Coeffientr
-1.082686755
18.03903464
4.108420261
26.18094234
-0.387597908
StandardErrr
0.540688153
7.360543208
9.519314099
13.98414731
0.153837524
t Sta
-2.002423669
2.450774913
0.431587845
1.872187254
-2.519527739
P-value
0.048317696
0.016232981
0.667096531
0.064501954
0.013556643
Lower 95%
-2.157191671
3.411490434
-14.80923076
-1.609633313
-0.693317896
Upper 95%
-0.008181839
32.66657884
23.02607128
53.971518
-0.081877921
The Correlation Between Market Fundamentals and Apartment REIT Performance
Lar95,0%
-2.157191671
3.411490434
-14.80923076
-1.609633313
-0.693317896
Upper95.0%
-0.008181839
32.66657884
23.02607128
53.971518
-0.081877921
126
Appendix 13
Panel Data Results
% Change in N.I. per Unit v. WARG (NREI), WAEG, WASG, % Change in # of Apts, %in MSA
RErmstrion
Satitics
Multiple R
0.363665818
R Square
Adjusted R Square
Standard Error
Observations
0.132252827
0.0823823
0.753845833
93
ANOVA
df
5
87
92
SS
7.535222624
49.44066794
56.97589057
MS
1.507044525
0.56828354
F
2.651923591
Sinifancr F
0.027978548
Coeffientx
-1.08606074
18.00587515
-26.00013739
30.04432644
-0.386826446
0.012667418
Standad Enr
0.569317415
7.585850022
16.71572125
18.74850731
0.159448133
0.632929077
t Stat
-1.907654167
2.373613385
-1.555430185
1.602491652
-2.426033085
0.020013962
P-Wdce
0.05973484
0.019816298
0.123474072
0.112671677
0.017330005
0.984078065
Lover 95%
-2.217641568
2.928165899
-59.22446743
-7.220388936
-0.703747105
-1.245348568
Regression
Residual
Total
Intercept
NREI WARG
WAED
WAEG
%D # Apts
%Total in MSA
Upper95%
0.045520089
33.08358439
7.224192661
67.30904182
-0.069905787
1.270683404
Lorr95.0%
-2.217641568
2.928165899
-59.22446743
-7.220388936
-0.703747105
-1.245348568
Upper 95.0%
0.045520089
33.08358439
7.224192661
67.30904182
-0.069905787
1.270683404
%Change in Market Cap per Unit v. WARG (Govt), %Change in # of Apts
Rernion Statistis
Multiple R
0.322700136
R Square
0.104135377
Adjusted R Square
0.083774818
Standard Error
0.337051972
Observations
91
ANOVA
df
Regression
Residual
Total
2
88
90
Coeffientts
Intercept
GOVT WARG
%D # Apts
SS
1.162070099
9.997154817
11.15922492
Standard E
0.309827468
-3.395374461
-0.332003899
r
0.167909159
4.85525935
0.105641918
MS
0.58103505
0.113604032
Stat
1.845208867
-0.699318866
-3.142728818
F
5.114563623
P-
e
0.068370533
0.486197135
0.00228132
Sinifancr F
0.007918903
Loer 95%
-0.023856958
-13.0441896
-0.541945174
Upper95-/o
0.643511895
6.253440681
-0.122062625
Loer 95.0%
-0.023856958
-13.0441896
-0.541945174
Upper95.0%
0.643511895
6.253440681
-0.122062625
%Change in Market Cap per Unit v. WARG (Govt), %Change in # of Apts, % in MSA
Resrnon Statistrr
Multiple R
0.326902145
R Square
0.106865013
Adjusted R Square
0.076067254
Standard Error
0.338466695
Observations
91
ANOVA
df
Regression
Residual
Total
Intercept
GOVT WARG
%D # Apts
%Total in MSA
3
87
90
SS
1.192530711
9.966694205
11.15922492
MS
0.397510237
0.114559704
F
3.469895825
SOnifanr F
0.019540472
Coe9tintis
0.391312642
-3.075956624
-0.340559461
-0.111028021
SanrdError
0.231089794
4.914831495
0.107374987
0.215317451
t Stat
1.693335894
-0.625851899
-3.171683376
-0.515648037
P-wale
0.093969407
0.533050558
0.002094049
0.607408176
Lower 95%
-0.068003678
-12.84472348
-0.553979029
-0.538995081
Upper95%
0.850628963
6.692810235
-0.127139893
0.316939039
The Correlation Between Market Fundamentals and Apartment REIT Performance
Laer95.0%
-0.068003678
-12.84472348
-0.553979029
-0.538995081
Upper95,0%
0.850628963
6.692810235
-0.127139893
0.316939039
127
Appendix 13
Panel Data Results
%Change in Market Cap per Unit v. WARG (NREI), %Change in # of Apts
Regsrion Stisfis
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.614585298
0.377715088
0.363572249
0.280912015
91
ANOVA
df
Regression
Residual
Total
SS
2
88
90
Coeffiiens
Intercept
NREI WARG
%D #Apts
4.215007624
6.944217292
11.15922492
StandandErr
-0.378333748
14.95491561
-0.390543176
0.097873352
2.382753848
0.08853155
MS
2.107503812
0.07891156
tStat
-3.865543992
6.276315796
-4.411344598
F
26.7071619
P-value
0.000211715
1.27086E-08
2.89914E-05
Sinifwann F
8.62041E-10
Lower 95%
-0.572836619
10.21968939
-0.566481165
Upper95%
-0.183830877
19.69014184
-0.214605188
Lower95.0%
-0.572836619
10.21968939
-0.566481165
Upper95.0%
-0.183830877
19.69014184
-0.214605188
% Change in Market Cap per Unit v. WARG (NREI), % Change in # of Apts, % in MSA
Retression
Statirtics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.61529226
0.378584566
0.357156447
0.282324396
91
ANOVA
edf
Regression
Residual
Total
SS
3
87
90
Coefficents
4.224710317
6.934514599
11.15922492
StandardErnr
MS
1.408236772
0.079707064
tStat
F
17.66765322
P-Male
Snificanc F
4.83523E-09
L.0mr95%
Upper95%
Intercept
NREI WARG
-0.436250889
15.09914383
0.192955759
2.43015146
-2.260885564
6.213252167
0.026261082
1.73416E-08
-0.81977163
10.26895116
-0.052730148
19.92933649
%D # Apts
%Total in MSA
-0.386137562
0.063082423
0.089868213
0.180805083
-4.296709015
0.348897398
4.50009E-05
0.728009319
-0.564760496
-0.296287518
-0.207514628
0.422452364
Loer95,0%
-0.81977163
10.26895116
-0.564760496
-0.296287518
Upper95.0%
-0.052730148
19.92933649
-0.207514628
0.422452364
% Change in Market Cap per Unit v. WAEG, WASG, %Change in # of Apts
Rc,-msion Statitics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.41513231
0.172334835
0.143794657
0.325825243
91
ANOVA
df
Regression
Residual
Total
SS
3
87
90
Coeffsants
Intercept
WAEG
WASG
%D # Apts
0.283191322
7.281688197
-14.54571228
-0.385110904
1.923123185
9.236101731
11.15922492
StandardErrr
0.14101794
4.150871027
5.447183114
0.104062784
MS
0.641041062
0.106162089
t Stat
2.008193577
1.754255468
-2.670318214
-3.700755328
F
6.03832374
P-vae
0.047724589
0.082907917
0.009042494
0.000376194
Stnificnce F
0.00087514
Lower95%
0.002902693
-0.968623408
-25.37258639
-0.591947105
Upper 95%
0.563479952
15.5319998
-3.718838173
-0.178274702
The Correlation Between Market Fundamentals and Apartment REIT Performance
Loer 95.0%
0.002902693
-0.968623408
-25.37258639
-0.591947105
Upper95.0%
0.563479952
15.5319998
-3.718838173
-0.178274702
128
Appendix 13
Panel Data Results
%Change in Market Cap per Unit v. WAED, %Change in # of Apts
ReRnrsion Statics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.393599278
0.154920392
0.135714037
0.327359155
91
ANOVA
SS
df
Regression
Residual
Total
2
88
90
Coeffentr
Intercept
WAED
%D #Apts
1.728791495
9.430433421
11.15922492
StandaniErvr
0.107202864
9.346012126
-0.368159929
0.054720147
3.878450257
0.103792166
MS
0.864395748
0.107164016
tStat
1.959111404
2.409728501
-3.547087821
F
8.066100717
Pvalue
0.053265606
0.018047317
0.000627026
Sinifsance F
0.000607429
Lower 95%
-0.001542013
1.638401292
-0.574425208
Upper 95%
0.215947742
17.05362296
-0.16189465
Lower95. 0o
-0.001542013
1.638401292
-0.574425208
Upper95.0%
0.215947742
17.05362296
-0.16189465
% Change in Market Cap per Unit v. WARG (Govt), WAEG, WASG, % Change in # of Apts
Regmrsion Statistics
Multiple R
0.442360989
R Square
0.195683245
Adjusted R Square
0.158273163
Standard Error
0.323058631
Observations
91
ANOVA
df
Regression
Residual
Total
SS
4
86
90
Coeffient
Intercept
GOVT WARG
WAEG
WASG
%D # Apts
2.183673341
8.975551575
11.15922492
StandardErrr
0.519922825
-7.772905536
9.39823206
-16.49672728
-0.398989103
0.204934344
4.919478518
4.328140652
5.540286978
0.103552368
MS
0.545918335
0.104366879
tStat
2.537021451
-1.580026319
2.171424825
-2.977594364
-3.85301765
F
5.230762303
P-value
0.012984411
0.117772034
0.03265308
0.003773529
0.00022418
Signifwance F
0.000807528
Loer95%
0.112527165
-17.55249722
0.794180195
-27.51044433
-0.604844231
Upper95%
0.927318486
2.006686145
18.00228392
-5.483010228
-0.193133975
Loer 95.0%
0.112527165
-17.55249722
0.794180195
-27.51044433
-0.604844231
Upper95.0%
0.927318486
2.006686145
18.00228392
-5.483010228
-0.193133975
% Change in Market Cap per Unit v. WARG (Govt), WAEG, WASG, % Change in # of Apts, %in MSA
Refsion Statirtin
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.44580177
0.198739218
0.151606231
0.324335507
91
ANOVA
df
Regression
Residual
Total
SS
5
85
90
Coeffwcjnt
Intercept
GOVT WARG
WAEG
WASG
%D # Apts
%Total in MSA
0.468568779
-8.214835806
8.744150962
-18.47887689
-0.393546427
0.155515781
2.217775634
8.941449282
11.15922492
Standard Eror
0.224645677
4.999539458
4.494536165
6.56180002
0.104400198
0.273134883
MS
0.443555127
0.105193521
tStat
2.08581258
-1.643118506
1.945506865
-2.816129238
-3.769594651
0.569373562
F
4.216563176
P-wlre
0.039993691
0.104052765
0.05501911
0.006041126
0.000301068
0.57060427
Sinfiance F
0.001796645
Lower95%
0.02191272
-18.15526565
-0.192196435
-31.52550114
-0.601122115
-0.387549868
Upper95%
0.915224838
1.725594038
17.68049836
-5.43225264
-0.185970739
0.69858143
The Correlation Between Market Fundamentals and Apartment REIT Performance
Lower95.0%
0.02191272
-18.15526565
-0.192196435
-31.52550114
-0.601122115
-0.387549868
Upper95.0/o
0.915224838
1.725594038
17.68049836
-5.43225264
-0.185970739
0.69858143
129
Appendix 13
Panel Data Results
% Change in Market Cap per Unit v. WARG (NREI), WAEG, WASG, % Change in # of Apts
Rensiomn Stadres
Multiple K
0.64788819
K Square
0.419759106
Adjusted R Square
0.392771158
0.274392323
Standard Error
Observations
91
ANOVA
df
Regression
Residual
Total
Intercept
NREI WARG
WAEG
WASG
%D # Apts
Ss
4
86
90
4.684186279
6.475038637
11.15922492
Coeffinntft
-0.683278441
16.32760045
8.2878593
-0.231480915
-0.402150335
Standad Eevr
0.198932827
2.69622515
3.499584612
5.16050795
0.087681185
MS
1.17104657
0.075291147
F
15.55357592
Sinifzwce F
1.3033E-09
tStat
-3.434719398
6.055725893
2.368240868
-0.044856227
-4.586506616
Pvalue
0.000915124
3.56565E-08
0.020114465
0.964325899
1.5208E-05
Loner95%
-1.078743492
10.9676866
1.330920992
-10.49022286
-0.57645462
Upper95%
-0.28781339
21.6875143
15,24479761
10.02726103
-0.22784605
LonUer
95
-1.078743492
10.9676866
1.330920992
-10.49022286
-0.57645462
.00%%
-0.28781339
21.6875143
15.24479761
10.02726103
-0.22784605
% Change in Market Cap per Unit v. WARG (NREI), WAEG, WASG, % Change in # of Apts, % in MSA
Regrmsion Satti
Multiple R
0.652811749
R Square
0.426163179
Adjusted R Square
0.392408072
Standard Error
0.274474346
Observations
91
ANOVA
df
Regression
Residual
Total
Intercept
NREI WARG
WAEG
WASG
%D # Apts
%Total in MSA
SS
MS
F
SivifaneF
5
85
90
4.755650767
6.403574149
11.15922492
0.951130153
0.075336166
12.6251467
3.55372E-09
Coeflfcientr
-0.623194336
16,91738672
9.459242717
3.028170039
-0.411899466
-0.227934357
StandardE"r
0.20833534
2.76417615
3.70147159
6.152050918
0,088276735
0.234027237
IStat
-2.991303995
6.12022744
2.55553568
0.492221225
-4.666002507
-0.97396508
P-lsae
0,003634222
2.7763E-08
0.012381849
0.623831891
1.13361E-05
0.332837524
Lower 95%
-1.037421057
11.42146068
2.099721112
-9.203762732
- -0.587417371
-0.693243482
Upper95%
-0.208967615
22.41331276
16.81876432
15,26010281
-0.236381562
0.237374768
Loner95.0%
-1.037421057
11.42146068
2.099721112
-9.203762732
-0.587417371
-0.693243482
Upper95.0%
-0.208967615
22.41331276
16.81876432
15.26010281
-0,236381562
0.237374768
Lowr95, 0%
0.074233639
-0.620368539
-0.029352046
Upper 95 0%
0.099496918
0,11014413
-0.013457374
Cap Rate v. WARG (Govt), % Change in # of Apts
Repsrnon Sttri
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.504894105
0,254918058
0.237984377
0.012759118
91
ANOVA
Ss
df
Regression
Residual
Total
Intercept
GOVT WARG
%D # Apts
2
88
90
0.004901404
0.014325967
0.019227372
Coefficients
0.086865278
-0.255112205
-0,02140471
StandardErr
0.006356209
0.183796063
0.00399908
MS
0.002450702
0.000162795
F
15.05390736
S~.mfcansn F
2.3822E-06
I Sat
13.66620908
-1.38801779
-5.352409116
P-value
1.79048E-23
0.168635822
6.8264E-07
Lower95%
0.074233639
-0.620368539
-0.029352046
Upper 95%
0.099496918
0.11014413
-0.013457374
The Correlation Between Market Fundamentals and Apartment REIT Performance
130
Appendix 13
Panel Data Results
Cap Rate v. WARG (Govt), %Change in # of Apts, %in MSA
etmssion
Statistiw
Multiple R
0.535215534
R Square
0.286455668
Adjusted R Square
0.261850691
Standard Error
0.012557721
Observations
91
ANOVA
df
3
87
90
SS
0.00550779
0.013719582
0.019227372
MS
0.00183593
0.000157696
F
11.64218393
Sienificane F
1.73557E-06
Coeffwientr
0.098362255
-0.210044628
-0.022611839
-0.015665261
StandardEnmr
0.008573845
0.18234905
0.003983804
0.007988663
IStat
11.47236187
-1.151882214
-5.675941109
-1.960936523
P-alue
4.27516E-19
0.252525035
1.78331E-07
0.05308523
Lower 95%
0.081320797
-0.572483373
-0.030530087
-0.031543606
Regression
Residual
Total
Intercept
GOVT WARG
%D # Apts
%Total in MSA
Upper95%
0.115403713
0.152394117
-0.01469359
0.000213083
Lower95.0%
0.081320797
-0.572483373
-0.030530087
-0.031543606
Upper 95.0/%
0.115403713
0.152394117
-0.01469359
0.000213083
Lower95.0%
0.083529031
-0.557998646
-0.027355692
Uppr 950%
0.100294529
-0.149837937
-0.012190424
Lower95,0%
0.096284196
-0.602694556
-0.028650179
-0.036716246
Upper95.0%
0.127824696
-0.205462613
-0.013960344
-0.007161893
Cap Rate v. WARG (NREI), %Change in # of Apts
ReRnxsion Stattis
Multiple R
0.573717449
R Square
0.329151711
Adjusted R Square
0.313905159
Standard Error
0.012106839
Observations
91
ANOVA
df
2
88
90
SS
0.006328722
0.012898649
0.019227372
MS
0.003164361
0.000146576
F
21.58859989
SirnificanceF
2.35218E-08
Coeffiients
0.09191178
-0.353918291
-0.019773058
StandardEntror
0.004218178
0.102692718
0.003815562
tat
21.78944896
-3.446381593
-5.182213579
P-alue
3.21242E-37
0.000873082
1.3804E-06
Lower 95%
0.083529031
-0.557998646
-0.027355692
Regression
Residual
Total
Intercept
NREI WARG
%D # Apts
Upper95%
0.100294529
-0.149837937
-0.012190424
Cap Rate v. WARG (NREI), %Change in # of Apts, % in MSA
Rerersion Statistics
Multiple R
0.624650742
R Square
0.39018855
Adjusted R Square
0.369160569
Standard Error
0.011609088
Observations
91
ANOVA
df
Regression
Residual
Total
Intercept
NREI WARG
%D # Apts
%Total in MSA
3
87
90
SS
0.0075023
0.011725071
0.019227372
MS
0.002500767
0.000134771
F
18.55568296
Signi/cance F
2.16022E-09
Coeffients
0.112054446
-0.404078584
-0.021305261
-0.021939069
Standard Enr
0.007934279
0.099927048
0.003695352
0.007434647
tStat
14.12282686
-4.043735848
-5.765421246
-2.950922838
P-Value
3.12334E-24
0.000113397
1.21648E-07
0.004070648
Lower 95%
0.096284196
-0.602694556
-0.028650179
-0.036716246
Upper95%
0.127824696
-0.205462613
-0.013960344
-0.007161893
The Correlation Between Market Fundamentals and Apartment REIT Performance
131
Appendix 13
Panel Data Results
Cap Rate v. WAEG, WASG, % Change in # of Apts
Rternion Statitics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.55460087
0.307582125
0.283705647
0.012370421
91
ANOVA
df
SS
Regression
Residual
Total
3
87
90
Coeffientr
Intercept
WAEG
WASG
%D # Apts
0.005913996
0.013313376
0.019227372
StandardEnmr
0.086159225
-0.461353746
0.300877623
-0.019872647
0.005353948
0.157593747
0.206810086
0.003950892
MS
0.001971332
0.000153027
tStat
16.09265408
-2.927487644
1.454849848
-5.02991381
F
12.88222324
P-tae
8.18324E-28
0.004360079
0.149309464
2.61031E-06
SiRnificane F
4.85306E-07
Lower95%/
0.075517667
-0.774588609
-0.110180115
-0.027725479
Upper 95%
0.096800783
-0.148118883
0.711935361
-0.012019816
Lower 95.0/
0.075517667
-0.774588609
-0.110180115
-0.027725479
Uppr95.0%
0.096800783
-0.148118883
0.711935361
-0.012019816
Cap Rate v. WAED, %Change in # of Apts
Reresion Statiticr
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.55013577
0.302649365
0.286800487
0.012343668
91
ANOVA
df
Regression
Residual
Total
2
88
90
Coeffcientr
Intercept
WAED
%D # Apts
0.082271305
-0.4157489
-0.019498168
SS
0.005819152
0.01340822
0.019227372
StandardEmr
0.002063322
0.146243967
0.003913671
MS
0.002909576
0.000152366
t Stat
39.87322812
-2.842844791
-4.982066267
F
19.09594887
P-vale
4.05247E-58
0.005557572
3.11618E-06
SuniFnc F
1.29376E-07
Lowr95%
0.078170883
-0.706378278
-0.027275773
Upper95%
0.086371727
-0.125119522
-0.011720563
Loer95.0%
0.078170883
-0.706378278
-0.027275773
Upper 95.0%
0.086371727
-0.125119522
-0.011720563
Cap Rate v. WARG (Govt), WAEG, WASG, %Change in # of Apts
RcXrrion Statitir
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.556591388
0.309793973
0.277691367
0.012422246
91
ANOVA
df
Regression
Residual
Total
SS
4
86
90
Coeffcients
Intercept
GOVT WARG
WAEG
WASG
%D # Apts
0.089183686
-0.099305956
-0.434312968
0.275951627
-0.020049954
0.005956524
0.013270848
0.019227372
StandardE ror
0.007880132
0.189163712
0.166425598
0.21303503
0.003981794
MS
0.001489131
0.000154312
tStat
11.31753675
-0.524973604
-2.609652445
1.295334516
-5.035407066
F
9.650119185
P-value
1.02282E-18
0.600952306
0.010688874
0.198671209
2.59545E-06
Sinicance F
1.70633E-06
Louwr 95%
0.073518514
-0.475350665
-0.765155839
-0.147547652
-0.027965492
Upper95%
0.104848858
0.276738753
-0.103470098
0.699450906
-0.012134416
The Correlation Between Market Fundamentals and Apartment REIT Performance
0
Lowr 95 0
0.073518514
-0.475350665
-0.765155839
-0.147547652
-0.027965492
Upper 95.0%
0.104848858
0.276738753
-0.103470098
0.699450906
-0.012134416
132
Appendix 13
Panel Data Results
Cap Rate v. WARG (Govt), WAEG, WASG, % Change in # of Apts, %in MSA
Rearon Statirtir
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.586691167
0.344206525
0.305630438
0.012179629
91
ANOVA
df
SS
Regression
Residual
Total
5
85
90
Ceeffwi-rt
Intercept
GOVT WARG
WAEG
WASG
%D # Apts
%Total in MSA
MS
0.006618187
0.012609185
0.019227372
StandardEror
0.096336901
-0.037748543
-0.343204613
0.552049486
-0.020808076
-0.021662126
0.00843602
0.187745505
0.168781338
0.246412388
0.003920495
0.010256914
0,001323637
0.000148343
i Stat
11.4197096
-0.201062301
-2.033421492
2,240347943
-5.307512875
-2.111953531
F
8.92279529
P-vdale
7.55544E-19
0.841130209
0.045128797
0.027676696
8.72448E-07
0.037625506
SiROWran F
7.65312E-07
Lower95%
0.079563823
-0.41103713
-0.678787334
0.062115348
-0.028603074
-0.042055631
Upper95%
Lower95 0%
0.113109979
0.335540043
-0.007621893
1.041983624
-0.013013078
-0.001268621
0.079563823
-0.41103713
-0.678787334
0.062115348
-0.028603074
-0.042055631
Upper95.0%
0.113109979
0.335540043
-0.007621893
1.041983624
-0.013013078
-0.001268621
Cap Rate v. WARG (NREI), WAEG, WASG, % Change in # of Apts
Rctrnion Stair
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.653072652
0.426503889
0.399829651
0.011323377
91
ANOVA
df
Regression
Residual
Total
SS
4
86
90
Ceffsdert
Intercept
NREI WARG
WAEG
WASG
%D # Apts
Standanilrd
0.113971771
-0.469866875
-0.490308795
-0.111049603
-0.019382296
MS
0.008200549
0.011026823
0.019227372
r
0.008209382
0.11126541
0.14441773
0.21295923
0.003618349
0.002050137
0.000128219
tStat
13.88311188
-4.22293753
-3.395073408
-0.52145945
-5.356668746
F
15.9893562
P-vasc
1.12506E-23
5.96653E-05
0.001040101
0.603387072
6.97873E-07
SW7ificanc F
8.00312E-10
Lower95%
0.097652072
-0.691055009
-0.777401508
-0.534398197
-0.026575329
Upper95%
0.130291469
-0.24867874
-0.203216083
0.312298991
-0.012189262
Lower 95,0%
0.097652072
-0.691055009
-0.777401508
-0.534398197
-0.026575329
Upper95.0%
0.130291469
-0.24867874
-0.203216083
0.312298991
-0.012189262
Cap Rate v. WARG (NREI), WAEG, WASG, % Change in # of Apts, % in MSA
RP.rionStatirtzr
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.663625179
0.440398379
0.407480636
0.01125097
91
ANOVA
df
Regression
Residual
Total
SS
5
85
90
Coefsacentr
Intercept
NREI WARG
WAEG
WASG
%D # Apts
%Total in MSA
0.117645403
-0.433806455
-0.418688651
0.088250361
-0.019978372
-0.01393625
0.008467703
0.010759668
0.019227372
StandardErrvr
0.008539868
0.113306268
0.15172692
0.252178549
0.003618549
0.009593004
MS
0.001693541
0.000126584
Stat
13.77602096
-3.828618329
-2.759488241
0.349951893
-5.521100107
-1.452751349
F
13.37875402
P-vawe
2.27842E-23
0.00024567
0.007088851
0.727240439
3.59398E-07
0.149974549
Sienifanc F
1.28032E-09
Lower95%5
0.100665847
-0.659089808
-0.720362598
-0.413148458
-0.027173022
-0.033009723
Upper95%
0.134624959
-0.208523103
-0.117014704
0.589649179
-0.012783723
0.005137224
The Correlation Between Market Fundamentals and Apartment REIT Performance
Lwer95.0%
0.100665847
-0.659089808
-0.720362598
-0.413148458
-0.027173022
-0.033009723
Upper95.0%
0.134624959
-0.208523103
-0.117014704
0.589649179
-0.012783723
0.005137224
133
Appendix 14
Cross-Section Panel Data Results
Average %Change in FFO per Unit v. Average WARG (Govt)
Resrar/aon
Smtsrfe#
Multiple R
0.270408318
RSquare
0.073120659
Adjusted R Square
0.018598345
Standard Error
0.147623186
Observations
19
ANOVA
df
Regression
Residual
Total
1
17
18
Coffinent
-0.20125835
9.286894726
Intercept
Govt WARG Average
SS
0.029226375
0.370474284
0.399700659
MS
0.029226375
0.021792605
F
1.341114364
Sipnoanc F
0.262848895
StondardE-rrr
0.270816791
8.019321326
IStat
-0.743153146
1.158064922
P-value
0.46753559
0.262848895
LUpper
-0.772632632
-7.632417961
95%
0.370115932
26.20620741
Lai 95.0%
-0.772632632
-7.632417961
Upper 95.0%
0.370115932
26.20620741
Average %Change in FFO per Unit v. Average WARG (Govt), %Change in # of Apts
Ruerr.ion Statiuigr
Multiple R
RSquare
Adjusted RSquare
Standard Error
Observations
0.362853286
0.131662507
0.023120321
0.147282693
19
ANOVA
lf
2
16
18
SS
0.052625591
0.347075068
0.399700659
MS
0.026312795
0.021692192
F
1.213007691
SiniinreF,,
0.323227591
Caffianst
-0.210638815
10.70474952
-0.155548667
Standard Error
0.270343066
8.116455692
0.149767425
t Stt
-0.779153754
1.318894592
-1.038601464
P-vale
0.447260935
0.205770501
0.314431946
Lawar 95%
-0.783740384
-6.50136403
-0.473041352
Regression
Residual
Total
Intercept
Govt WARG Average
%D #ofApts
Upper 95%
0.362462754
27.91086307
0.161944019
Lowr 95,0%
-0.783740384
-6.50136403
-0.473041352
Upper
95 0%
0.362462754
27.91086307
0.161944019
Lwr 95.0%
-0.49271764
1.192005111
Upper 95.0%
0.070782593
15.28930527
Average %Change in FFO per Unit v. Average WARG (NREI)
RArarion Statirtir
Multiple R
0.513385622
R Square
0.263564797
Adjusted R Square
0.22024508
Standard Error
0.131586169
Observations
19
ANOVA
dl
Regression
Residual
Total
Intercept
NREI WARG Average
1
17
18
SS
0.105347023
0.294353636
0.399700659
MS
0.105347023
0.01731492
F
6.084176231
SignifaneF
0.024567585
Coaeentzr
-0.210967524
8.240655189
SoandSardError
0.133542346
3.340879795
Sat
-1.579779968
2.466612298
P-valu
0.132582792
0.024567585
La 95%
-0.49271764
1.192005111
Upper95%
0.070782593
15.28930527
The Correlation Between Market Fundamentals and Apartment REIT Performance
134
Appendix 14
Cross-Section Panel Data Results
Average %Change in FFO per Unit v. Average WARG (NREI), %Change in # of Apts
RererionStatirtar
Multiple R
0.576240525
RSquare
0.332053143
Adjusted RSquare
0.248559785
Standard Error
0.129174978
Observations
19
ANOVA
df
Regression
Residual
Total
2
16
18
Intercept
NREI WARG Average
%D # ofApts
Cffodirienrs
-0.191331416
8.78919347
-0.16725581
SS
0.13272186
0.266978799
0.399700659
MS
0.06636093
0.016686175
F
3.977000733
SinifnneF
0.039621899
StandrEr-r
0.131988661
3.30750466
0.130582157
tStot
-1.449604953
2.657348779
-1.280847346
P-cvl
0.166486883
0.017209189
0.218502764
Loer95/.
-0.471134815
1.777598398
-0.444077554
Upper95%
0.088471982
15.80078854
0.109565935
Loer95.0%
-0.471134815
1.777598398
-0.444077554
Upper95.0%
0.088471982
15.80078854
0.109565935
L-r 95.0%
-0.28047479
-7.71794652
-16.28938597
Upper95.0%
0.400110682
14.97660643
10.18958252
Average %Change in FFO per Unit v. Average WAEG, WASG
IRrerniorStatirtar
Multiple R
0.173441244
RSquare
0.030081865
Adjusted R Square
-0.091157902
Standard Error
0.155659267
Observations
19
ANOVA
If
Regression
Residual
Total
Intercept
WAEG Average
WASG Average
2
16
18
Cosie-r
0.059817946
3.629329955
-3.049901723
SS
0.012023741
0.387676918
0.399700659
MS
0.006011871
0.024229807
F
0.248118798
Si fnwae F
0.78321435
St-anrdError
0.160522648
5.352729219
6.245320129
tStat
0.3726449
0.678033543
-0.488349942
P-value
0.714302968
0.507438337
0.631927312
Lonr 95/t
-0.28047479
-7.71794652
-16.28938597
Uppr 95%
0.400110682
14.97660643
10.18958252
Average %Change in FFO per Unit v. Average WAEG, WASG, %Change in # of Apts
RgrrionStatrticr
Multiple R
0.26760386
R Square
0.071611826
Adjusted R Square
-0.114065809
Standard Error
0.157284745
Observations
19
ANOVA
d
Regression
Residual
Total
Intercept
WAEG Average
WASG Average
%D #of Apts
3
15
18
Coeffriaer
0.111902631
3.571548514
-3.913123631
-0.131623637
SS
0.028623294
0.371077365
0.399700659
MS
0.009541098
0.024738491
F
0.385678253
Sienifxan F
0.764898055
SlmdardError
0.1742166
5.409085267
6.397920524
0.160683876
St
0.642318996
0.660286969
-0.611624295
-0.819146517
P-vale
0.53036148
0.519081377
0.549944687
0.425526819
LoaWr95%
-0.259431489
-7.957650907
-17.54997681
-0.474113422
Upper9%
0.483236752
15.10074794
9.723729545
0.210866148
Lor 95,0%
-0.259431489
-7.957650907
-17.54997681
-0.474113422
The Correlation Between Market Fundamentals and Apartment REIT Performance
Upper95.0%
0.483236752
15.10074794
9.723729545
0.210866148
135
Appendix 14
Cross-Section Panel Data Results
Average %Change in FFO per Unit v. Average WAED
RerrienStlbrtiar
Multiple R
0.171808896
R Square
0.029518297
Adjusted R Square
-0.027568862
0.151055536
Standard Error
19
Observations
ANOVA
df
Regression
Residual
Total
Intercept
WAED Average
1
17
18
CaJiaWrtr
0.074072327
3.422665778
SS
0.011798483
0.387902177
0.399700659
MS
0.011798483
0.022817775
F
0.517074196
Sipifirac F
0.481860831
Stard Error
0.060694575
4.759792934
I Stl
1.220411013
0.719078713
P-vale
0.238968074
0.481860831
Lr 95%
-0.053982211
-6.619633525
UPPtr95%
0.202126865
13.46496508
Laer 95.0%/
-0.053982211
-6.619633525
Upper95.0%
0.202126865
13.46496508
Average %Change in FFO per Unit v. Average WAED, %Change in # of Apts
Raresion Statir.r
Multiple R
0.267249826
RSquare
0.07142247
Adjusted R Square
-0.044649722
Standard Error
0.152305829
Observations
19
ANOVA
Idf
2
16
18
55
0.028547608
0.371153051
0.399700659
MS
0.014273804
0.023197066
F
0.615328003
Siifaa F
0.552771144
CoaSffitr
0.103137841
3.69004969
-0.130005457
StandardError
0.070107746
4.809494928
0.152996692
tStat
1.471133324
0.767242662
-0.849727242
P-vale
0.160648767
0.454110955
0.408012163
Loaer 95%
-0.045483907
-6.505621793
-0.454343883
Regression
Residual
Total
Intrcept
WAED Average
%D # of Apt.
Uppr95%
0.25175959
13.88572117
0.194332968
Ler 95.0%
-0.045483907
-6.505621793
-0.454343883
Uppr95.0%/o
0.25175959
13.88572117
0.194332968
Lmer 95.0%
-0.629785802
-6.018030097
Uppr 95.0%
0.334142775
22.52544749
Average %Change in NOI per Unit v. Average WARG (Govt)
Rercan Statirtaa
Multiple R
0.283767761
R Square
0.080524142
Adjusted R Square
0.026437327
Standard Error
0.124522762
Observations
19
ANOVA
df
Regression
Residual
Total
Intercept
Govt WARG Average
1
17
18
SS
0.023085123
0.26360061
0.286685733
MS
0.023085123
0.015505918
P
1.488794306
Signf-anmF
0.239060181
Coefaier
-0.147821514
8.253708694
StandardError
0.228438741
6.764439039
ItStat
-0.647094765
1.22016159
P-lr
0.5262126
0.239060181
L r 95%
-0.629785802
-6.018030097
Upper95%
0.334142775
22.52544749
The Correlation Between Market Fundamentals and Apartment REIT Performance
136
Appendix 14
Cross-Section Panel Data Results
Average % Change in NOI per Unit v. Average WARG (NREI)
Rgrrion Stairtrc
Multiple R
0.538951447
R Square
0.290468663
Adjusted R Squre
0.248731525
0.109386662
Standard Error
Observations
19
ANOVA
df
1
17
18
SS
0.083273221
0.203412511
0.286685733
MS
0.083273221
0.011965442
F
6.959477341
SisnifaceF
0.017262697
cGausr1
-0.15655753
7.326613651
StAndardError
0.111012819
2.777250018
I Slat
-1.410265334
2.638082133
P-vae
0.176496367
0.017262697
Loer 95%
-0.390774432
1.467120117
Regression
Residual
Total
Intercept
NREI WARG Average
Uppr 95%/
0.077659372
13.18610718
Lwer 95.0%
-0.390774432
1.467120117
Upper 95.0%
0.077659372
13.18610718
Ler 95.0%
-0.164569175
-6.102877546
-15.71643341
Upper95.0%
0.404245485
12.864607
6.413961789
Lower95.0%
-0.018621034
-4.573432193
Upper95.0%
0.19579313
12.241366
Average %Change in NOI per Unit v. Average WAEG, WASG
Rerrn SaIt/drt
Multiple R
0.235408377
R Square
0.055417104
Adjusted R Square
-0.062655758
Standard Error
0.130095743
19
Observations
ANOVA
df
2
16
18
SS
0.015887293
0.27079844
0.286685733
MS
0.007943647
0.016924902
F
0.469346665
Siniran F
0.633753862
Cfw-nr
0.119838155
3.380864725
-4.651235809
StandardErrr
0.134160424
4.473664185
5.219667171
I Slat
0.893245203
0.755726086
-0.891098159
P-vala,
0.38496456
0.46079538
0.386080848
Le 9ow5
9595
-0.164569175
-6.102877546
-15.71643341
Regression
Residual
Total
Intercept
WAEG Average
WASG Average
Upper
0.404245485
12864607
6.413961789
Average % Change in NOI per Unit v. Average WAED
RsiruionStatintsa
Multiple R
0.227244775
R Square
0.051640188
Adjusted R Square
-0.004145683
Standard Error
0.126463486
Observations
19
ANOVA
df
Regression
Residual
Total
Intercept
WAED Average
1
17
18
SS
0.014804505
0.271881227
0.286685733
MS
0.014804505
0.015993013
F
0.925685783
Sini/can F
0.349473155
Cosicir
0.088586048
3.833966903
StandrdErrvr
0.050813414
3.984892065
tSeat
1.743359496
0.962125659
P-va
0.099326585
0.349473155
Lower 95%
-0.018621034
-4.573432193
Upper 95%
0.19579313
12.241366
The Correlation Between Market Fundamentals and Apartment REIT Performance
137
Appendix 14
Cross-Section Panel Data Results
Average %Change in Rental Revenue per Unit v. Average WARG (Govt)
RorernsoStatuisa
Multiple R
RSquare
Adjusted R Square
Standard Error
Observations
0.301797926
0.091081988
0.037616223
0.122732905
19
ANOVA
df
1
17
18
SS
0.025661305
0.256077221
0.281738526
MS
0.025661305
0.015063366
F
1.703557171
Sgniarn F
0.209213911
tContir
-0.17702669
8.702066787
Sled.rd Error
0.225155224
6.667208789
tStmt
-0.786242872
1.305203881
P-vale,
0.442547627
0.209213911
Lower 95%
-0.652063351
-5.364533821
Regression
Residual
Total
Intercept
Govt WARG Average
Upper95%
0.298009972
22.7686674
Lo r95.0%
-0.652063351
-5.364533821
Upper 95.0%/
0.298009972
22.7686674
Average %Change in Rental Revenue per Unit v. Average WARG (NREI)
Rewtr/on Staarr
Multiple K
0.608622001
RSquare
0.37042074
Adjusted R Square
0.333386666
Standard Error
0.102146588
Observations
19
ANOVA
df
1
17
18
Ss
0.104361793
0.177376732
0.281738526
MS
0.104361793
0.010433925
F
10.00216015
SinifismreP
F
0.005686736
Coof-ieotr
-0.204826822
8.202030397
StandardError
0.103665113
2.593429655
tSt
-1.97585105
3.162619191
P-vle.
0.064632747
0.005686736
Lower 95%
-0.423541398
2.73036447
Regression
Residual
Total
Interept
NREI WARG Average
Upper95/
0.013887753
13.67369632
Lower95.0%
-0.423541398
2.73036447
Upper95.0%
0.013887753
13.67369632
Average %Change in Rental Revenue per Unit v. Average WAEG, WASG
Ratorusion
Statitticr
Multiple R
0.255236092
RSquare
0.065145463
Adjusted RSquare
-0.051711354
Standard Error
0.128302508
Observations
19
ANOVA
df
Regression
Residual
Total
Intercept
WAEG Average
WASG Average
2
16
18
Co~ffesos
0.151724899
2.42714929
-5,426829758
SS
0.018353987
0.263384539
0.281738526
MS
0.009176993
0.016461534
F
0.557481065
Sipyfrec F
0.583381054
St-ndardError
0.132311162
4.41199936
5.147719469
Stat
1.146727886
0.550124579
-1.054220183
P-volvo
0.268354209
0.589831963
0.307442501
Lower95%
-0.128762171
-6.925869421
-16.33950507
Upper 95%
0.432211968
11.780168
5.485845558
Lowr95.0%/
-0.128762171
-6.925869421
-16.33950507
The Correlation Between Market Fundamentals and Apartment REIT Performance
Upper95.0%
0.432211968
11.780168
5.485845558
138
Appendix 14
Cross-Section Panel Data Results
Average %Change in Rental Revenue per Unit v. Average WAED
Rrana Stautria
Multiple R
0.209086703
RSquare
0.043717249
Adjusted R Square
-0.012534677
Standard Error
0.12589017
Observations
19
ANOVA
df
1
17
18
SS
0.012316833
0.269421692
0.281738526
MS
0.012316833
0.015848335
F
0.777168927
Signfrasnr F
0.390302876
Coeff-eatrE
0.077930448
3.497042783
S-ndrdEor
0.050583054
3.966826733
Stat
1.5406434
0.88157185
P-velo
0.141810769
0.390302876
Lower 95%
-0.028790616
-4.872241742
Regression
Residual
Total
Intercept
WAED Average
UPPr 95
0.184651511
11.86632731
Lar95 0/%
-0.028790616
-4.872241742
Upper 95,0%
0.184651511
11.86632731
Lowr95.0/
-0.464317461
-55.0917101
Upper95.0%
2.062035573
19.73694705
Ler 95.0%
-0.568095821
-16.99133889
Uper95.0%
0.887644751
19.399266
Average %Change in N.I. per Unit v. Average WARG (Govt)
Rgrraion Statlrtim
Multiple R
0.234998443
R.Square
0.055224268
Adjusted R Square
-0.000350775
Standard Error
0.326334636
Observations
19
ANOVA
df
Regression
Residual
Total
Intercept
GOVT WARG Average
1
17
18
Coi
0.798859056
-17.67738152
SS
0.105822131
1.810403009
1.91622514
MS
0.105822131
0.106494295
F
0.993688264
S
SanrError
tdardError
0.59871335
17.73343449
iSat
t
1.334293039
-0.996839137
P-vae
0.199706708
0.332820877
Lwr 95%/
-0.464317461
-55.0917101
ificranc
F
0.332820877
Upper95%/
2.062035573
19.73694705
Average %Change in N.I. pet Unit v. Average WARG (NREI)
Rgrn.on Statirtr
Multiple R
0.033839653
RSquare
0.001145122
Adjusted R Square
-0.057611047
Standard Error
0.335544406
Observations
19
ANOVA
df
Regression
Residual
Total
Intercept
NREI WARG Average
1
17
18
Coeffimentr
0.159774465
1.203963559
SS
0.002194312
1.914030828
1.91622514
MS
0.002194312
0.112590049
F
0.019489394
SiifmaneF
0.890613153
StandardError
0.344991893
8.624107824
tStat
0.463125275
0.139604419
P-vae
0.649148257
0.890613153
Lower 95/
-0.568095821
-16.99133889
Uppfr95%
0.887644751
19.399266
The Correlation Between Market Fundamentals and Apartment REIT Performance
139
Appendix 14
Cross-Section Panel Data Results
Average %Change in N.I. per Unit v. Average WAEG, WASG
Re-rerr/on
Statcr
Multiple R
0.279037984
R Square
0.077862197
Adjusted R Square
-0.037405029
Stndard Error
0.332323604
Observations
19
ANOVA
df
2
16
18
SS
0.149201499
1.767023641
1.91622514
MS
0.074600749
0.110438978
F
0.675492937
Sinifane F
0.522837358
Coesffimatr
-0.004145431
-3.290064574
15.04294674
SdnadardError
0.336323909
11.20083517
13.34829145
tStat
-0.012325711
-0.293733862
1.126956719
P-valuP
0.990318138
0.772737315
0.276379146
Loer 95%/o
-0.717120107
-27.03476905
-13.25416065
Regression
Residual
Total
Intercept
WAEG Average
WASG Average
Upper95%
0.708829245
20.4546399
43.34005414
r95.0%
-0.717120107
-27.03476905
-13.25416065
Upper95.0%
0.708829245
20.4546399
43.34005414
Ler95.0%
0.002485934
-29.02106752
Upper95.0%
0.563666832
14.57154397
Average %Change in N.I. per Unit v. Average WAED
RrerrionStatiria
Multiple R
0.167225451
R Square
0.027964352
Adjusted R Square
-0.029214216
Standard Error
0.331009076
Observations
19
ANOVA
df
Regression
Residual
Total
Intercept
WAED Average
1
17
18
SS
0.053585994
1.862639146
1.91622514
MS
0.053585994
0.109567009
F
0.489070517
Sigifan F
0.493800694
Cewffieir
0.283076383
-7.224761778
Stad-rdError
0.132992694
10.33089126
tSta
2.128510786
-0.699335769
P-ahlue
0.048217367
0.493800694
Lover 95%/.
0.002485934
-29.02106752
Uppr 95%
0.563666832
14.57154397
The Correlation Between Market Fundamentals and Apartment REIT Performance
140
Appendix 14
Cross-Section Panel Data Results
Average Cap Rate v. Average WARG (Govt)
Renrio$n Statrtir
Multiple R
RK
Square
Adjusted RSquare
Standard Error
Observations
0.355632017
0.126474131
0.075090257
0.010892044
19
ANOVA
df
Regression
Residual
Total
Intercept
GOVT WARG Average
1
17
18
Coosdaotrl
0.105971853
-0.941081951
SS
0.000292007
0.002016823
0.00230883
MS
0.000292007
0.000118637
F
2.461358401
SignifcansF
0.135102536
StaonrdError
0.020208369
0.599846344
t Stat
5.243958791
-1.568871697
P-vota
6.59863E-05
0.135102536
Lawr 95%
0.063335862
-2206648879
Upper 95%
0.148607843
0.324484977
l.-r 95.0%
0.063335862
-2.206648879
Upper95.0%
0.148607843
0.324484977
Upper95%
0.116171353
0.105619414
Lwer95.0o
0.069817286
-1.057459352
Uppr95.0%
0.116171353
0.105619414
Uppr95%
0.104457161
0.456361467
1.316595902
Lower95.0%
0.054423904
-1.207352699
-0.661266973
Uper95.0%
0.104457161
0.456361467
1.316595902
Average Cap Rate v. Average WARG (NREI)
Rorrion Sthrstria
Multiple R
0.386267765
RSquare
0.149202786
Adjusted R Square
0.099155891
Standard Error
0.010749408
Observations
19
ANOVA
1
17
18
SS
0.000344484
0.001964346
0.00230883
MS
0.000344484
0.00011555
F
2.981259601
Sinfian F
0.102358805
Coffaitr
0.09299432
-0.475919969
StandardError
0.010985321
0.275634789
tStoa
8.465325746
-1.726632445
P-Nvso
1.67624E-07
0.102358805
Lwer 95%
0.069817286
-1.057459352
df
Regression
Residual
Total
Intercept
NREI WARG Average
Average Cap Rate v. Average WAEG, WASG
R4rrerrian
Statirticr
Multiple R
0.241675076
RSquare
0058406843
Adjusted R Square
-0.059292302
Standard Error
0.011656485
Observations
19
ANOVA
sdf
Regression
Residual
Total
Intercept
WAEG Average
WASG Averaage
2
16
18
Coeffri
0.079440532
-0.375495616
0.327664464
SS
0.000134851
0.002173978
0.00230883
MS
6.74257E-05
0.000135874
F
0.496238462
SinfcnrsceF
0.617883148
Standard.Error
0.011800826
0.392403034
0.466498037
tStat
6.731777257
-0.956913131
0.702391946
P-vale
4.81842E-06
0.352847695
0.492527778
Loler 95%
0.054423904
-1.207352699
-0.661266973
The Correlation Between Market Fundamentals and Apartment REIT Performance
141
Appendix 14
Cross-Section Panel Data Results
Average Cap Rate v. Average WAED
R
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
Star
mrrnon
0.240248842
0.057719506
0.002291242
0,011312579
19
ANOVA
df
Regression
Residual
Total
Intercept
WAED Average
1
17
18
caffi-etr
0.078267986
-0.359349973
Ss
s
0.000133265
0.002175565
0.00230883
Sadar.dBrew
0.004504596
0.352145346
MF
0.000133265
0.000127974
1.041337065
Simfaim F
0.321814175
tSt
17.37513814
-1.020459242
P-v
Z94276E-12
0.321814175
Low 95%
0.068764105
-1.102312748
Upper 95%/
0.087771867
0.383612801
Lonr 95 0%
0.068764105
-1.102312748
Uppr95.0%/
0.087771867
0.383612801
Loer 95.0%
U
-0.923390306
-4.544908668
Upper
ppr 950%
95,0%
0.279198371
31.15161047
Low 95.0%
-0.623745395
7.758100169
Uper 95.0%/
-0.172906629
19.0701819
Average %Change in Market Cap per Unit v. Average WARG (Govt)
RarcrionStatirtaic
Multiple R
0.3563642
R Square
0.126995443
Adjusted R Square
0.075642234
Standard Error
0.153610234
Observations
19
ANOVA
df
Regression
Residual
Total
Intercept
GOVT WARG Average
s
1
17
18
Caeffinssnt
-0.322095968
13.3033509
0.058352685
0.401133765
0.459486451
s
F
0.058352685
0.023596104
Si.pifwan.eF
2.472979686
0.134243526
P-va4e
Error
ISta
Standard
C-Oid-~~~~~~~~~~~~~~~~~~~~pe
0.284998132
-1.130168698
0.274099255
8.459618382
1.572571043
0.134243526
Lowr 95
-0.923390306
-4.544908668
Upper 95%
9A
0.279198371
31.15161047
Average %Change in Market Cap per Unit v. Average WARG (NREI)
R
Multiple R
R Square
Adjusted RSquare
Standard Error
Observations
Statuitt
orersion
0.77175068
0.595599111
0.571810824
0.104548533
19
ANOVA
Ss
If
Regression
Residual
Total
Intercept
NRBI WARG Average
MS
F
Sipsisn F
1
17
18
0.273669722
0.185816729
0.459486451
0.273669722
0.010930396
25.03749417
0.000108722
Cafli-m#
-0.398326012
13.41414104
StandardError
0.10684302
2.680818659
tSta
-3.72814258
5.003748012
P-vae
0.001672446
0.000108722
Lower 95%
-0.623745395
7.758100169
Upper95%
-0.172906629
19.0701819
The Correlation Between Market Fundamentals and Apartment REIT Performance
142
Appendix 14
Cross-Section Panel Data Results
Average %Change in Market Cap per Unit v. Average WAEG, WASG
RgrarionSatiria
0.297199433
Multiple R
RSquare
0.088327503
Adjusted R Square
-0.025631559
Standard Error
0.161806435
Observations
19
ANOVA
d/
2
16
18
SS
0.040585291
0.41890116
0.459486451
MS
0.020292645
0.026181322
F
0.775080991
SignificaneF
0.477211419
Coesimtr
0.207047354
2.672184248
-8.02561996
StadrdError
0.163810062
5.447039472
6.475569766
tSat
1.263947717
0.490575525
-1.239368928
P-valr
0.224353623
0.630386542
0.233081136
Lamr 95%
-0.140214386
-8.875020986
-21.75321152
Regression
Residual
Total
Intercept
WAEG Average
WASG Average
Upper95%
0.554309094
14.21938948
5.701971602
Lo. 95.0%
-0.140214386
-8.875020986
-21.75321152
Upper95.0%/%
0.554309094
14.21938948
5.701971602
LIcr 95,0/
-0.059158732
-6.072006293
Uppr95.0/
0.210782139
15.03053238
Average %Change in Market Cap per Unit v. Average WAED
Reerrion Stairtia
Multiple R
0.212280385
R Square
0.045062962
Adjusted RSquare
-0.011109805
Standard Error
0.160656856
Observations
19
ANOVA
1
17
18
SS
0.02070582
0.43878063
0.459486451
MS
0.02070582
0.025810625
F
0.802220799
Sinifan F
0.382937659
Coeffsiatr
0.075811703
4.479263043
StandardError
0.063972533
5.001031707
t Stat
1.185066462
0.895667795
P-vaL
0.252293758
0.382937659
La- r 95%
-0.059158732
-6.072006293
sdf
Regression
Residual
Total
Intercept
WABD Average
Upr 95%
0.210782139
15.03053238
The Correlation Between Market Fundamentals and Apartment REIT Performance
143
Appendix 15
%of Portfolio in MSA with Rent Data (Govt and/or NREI)
REIT
I Asodnted Eset' Reiy Coportidon
Tnkr..
AEC
2 ApartmentInrtment &
Mgmt Co.
AIV
3 Ali Reidentil Ptoprties Trust
AML
4 Achstone Communitie Tust
ASN
5 AvalonBy CommunitiesInc
AVB
6 BRE Properdi , In.
BRE
7 Cmden Pp.t Tru st
CPT
B Equiy Rnsidntil Prpeties Tust
EQR
9 EtProperqTrut, Inc
ESS
10 Gable ResidenEilTust
GBP
11 Home Propcrtie oFNe York,Inc.
HME
12 MiAmuic Ap tmentCommunities.Inc
MAA
13 Pt Propneti, lne
PPS
14 RobcrtsRealt Instor Inc.
RPI
15 SummitP:pdi
SMT
Inc.
16 Chles E. SmithRidentil Relty
SRW
17 Cornston
TCR
18 Ton
Rlty IncomeTrust
nd Couny Tst, The
19 UnitedDominion Rly Trut, Inc.
TCT
UDR
%
Toto i MSA
Yu w/Rent BD
72.79%
1996
1997
71.27%
1998
76.18%
1999
70.65%
2000
71.25%
74.92%
1996
1997
77.73%
1998
68.70%
1999
67.76%
2000
65.69%
1996
95.60%A
1997
95.90%i
1998
96.47%
1999
%96.72%
2000
98.58%.
1996
80.166%
81.86%
1997
199
84.83%
1999
89.73%
2000
92.27%
1996
78.72%
1997
84.42%
81.14%
1998
81.92%
1999
2000
82.17'
98.65
1996
%.16%
1997
928%
1998
96.53%
1999
96.96%
2000
89.84%
1996
1997
91.19'h
1998
91.38%
91.61%.
1999
2000
91.00%
78.62%
1996
1997
7624%
1998
77.84%
1999
B0.12%h
2000
82.11%
8621%
1996
1997
88.64%
1998
87.55%A
1999
87.36%
88.89%
2000
1996
96.86%
9726%
1997
1998
98.01%
199
97,79%
2000
100.00%
8.66%
1996
1997
39.14%
1998
4521%
56.75S%
1999
60.65%
2000
5821%
1996
N.76%
1997
1998
52.76%
1999
5121%
51.08%
2000
95.81%
1996
9627%A
1997
96.61%
1998
1999
97.20'
2000
100.00%
88.72%
1996
1997
1000n
100.00%
1998
100.00%
1999
100.09%A
2000
7e.6s%
1996
1997
80.88%
82.44%
1998
1999
92.06'%
2000
94.48%
1996
100.00'
1997
100.00%
1998
1999
10.9O
2000
100.00%
1996
51.9%
1997
61.18%
1998
62.58%
1999
64.01%
2000
7127%
76.77%
1996
1997
76.77%
78.56%
1998
75.3P/
1999
2000
81.53%
1996
61.82'%
1997
63.58%
1998
63.84%
1999
69.60
2000
70.52'%
The Correlation Between Market Fundamentals and Apartment REIT Performance
144
Appendix 16
10-REIT Index
#
3
4
6
7
9
10
13
14
15
16
REIT
Amli Residential Properties Trust
Archstone Communities Trust
BRE Properties, Inc.
Camden Property Trust
Essex Property Trust, Inc.
Gables Residential Trust
Post Properties, Inc.
Roberts Realty Investors, Inc.
Summit Properties Inc.
Charles E. Smith Residential Realty
Ticker
AML
ASN
BRE
CPT
ESS
GBP
PPS
RPI
SMT
SRW
5 Year
Average
Govt MSA*
96.65%
85.77%
96.91%
91.00%
87.73%
97.99%
97.18%
97.74%
85.71%
100.00%
* 10 Apartment REITs with the greatest percent portfolio concentration in MSA with Govt Rent Data
The Correlation Between Market Fundamentals and Apartment REIT Performance
145
Appendix 17
10-REIT Data Results
% Change in FFO per Unit (10 REITs) v. WARG (Govt), % Change in # of Apts
Regnssion Starstars
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.654180838
0.427952569
0.403080942
0.239910432
49
ANOVA
df
2
46
48
SS
1.980704533
2.647622706
4.628327239
MS
0.990352267
0.057557015
F
17.20645625
Sgnfianae F
2.63595E-06
Coeffentr
0.402014989
-3.903298981
-0.909623826
StandardEnrr
0.15673632
4.464599183
0.160902375
tStat
2.564912766
-0.874277582
-5.653265388
P-valre
0.013647723
0.386508899
9.5519E-07
LoAger95%
0.086521441
-12.89006243
-1.233503198
Regression
Residual
Total
Intercept
Govt WARG
%D # of Apts
Upper
95%
0.717508537
5.083464472
-0.585744454
Law
L
95.0%
0.086521441
-12.89006243'
-1.233503198
Upper95.0%
0.717508537
5.083464472
-0.585744454
Average % Change in FFO per Unit (10 REITs) v. Average WARG (Govt), % Change in # of Apts
Rf,mssion Statirfcs
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.680057482
0.462478178
0.308900515
0.119307024
10
ANOVA
df
Regression
Residual
Total
Intercept
ovt WARG Average
%D # of Apts Average
2
7
9
SS
0.085728497
0.099639161
0.185367658
MS
0.042864248
0.014234166
F
3.011363555
Sinfwanm F
0.113863977
Cefzieant
0.003049407
9.755105589
-1.333045114
StandardEtnr
0.307369022
9.140374128
0.553766607
t Stat
0.009920995
1.067254519
-2.407232751
P-Vale
0.992361147
0.321275692
0.046964489
Loaer95%
-0.723762316
-11.85842928
-2.642494126
Upper95%/
0.729861129
31.36864046
-0.023596101
The Correlation Between Market Fundamentals and Apartment REIT Performance
Loar95.0%
-0.723762316
-11.85842928
-2.642494126
Upper95.0%/o
0.729861129
31.36864046
-0.023596101
146