All Is Peachy For Preferred Apartment Communities

A few years ago (2014) APTS expanded its strategy to include Grocery-Anchored Shopping Centers. The company targets grocery anchored assets located in the Mid-Atlantic, Southeast and Texas. Currently APTS owns shopping centers leased to Sprouts, Wal-Mart, The Fresh Market, Tom Thumb, HEB, Harris Teeter, Bi-Lo, Publix, and Kroger.

APTS focuses on grocers with strong credit and good sales in the submarket (Publix, Kroger, etc.) and most all of the centers consist of necessity-based operators for in-line shop space.

Although APTS formed as a “pure play” Multi-family REIT, I have been warming up to the grocery exposure. Let’s face, everyone needs “food and shelter” and APTS’s platform provides necessity attributes that provide durable sources of income.

I suspect that once the grocery portfolio reaches $1 Billion in AUM (assets under management) the company will seek to list or merge with an existing shopping center REIT. On the recent earnings call, Joel Murphy, explained,

“…we continue to discuss and review what a spin-off and mid-market as a standalone entity would like. But we want to get really clear on this. We'll only pursue such a transaction if we believe this to be a wise and biennial transaction for all our stockholders in the near and longer term.”