When considering spotlight ideas for our April 2023 Special Situations Newsletter, I was torn between picking the asset management firm Victory Capital (VCTR) and the multifamily REIT BRT Apartments (BRT). For reasons discussed in the newsletter, Victory emerged the winner but BRT was a close second.
BRT Apartments is a New York based multifamily REIT with 29 properties across 11 states that focuses primarily on sunbelt states like Texas, South Carolina and Alabama. We have been consistently seeing the brothers Jeffrey and Matthew Gould purchase shares of BRT indirectly through their real estate firm Gould Investors. Jeffrey serves as the President and CEO of BRT, while Matt is a Senior Vice President. In addition to its 17.53% stake in BRT, Gould Investors also has a stake in the diversified REIT One Liberty Properties (OLP). Interestingly we are only seeing insider purchases by Gould Investors and the brothers in BRT but not in OLP. BRT is the smaller of the REITs with a market cap of $396 million and One Liberty Properties has a market cap of $488 million.
A month before the bottom of the bear market in 2009, I wrote about and purchased the apartment REIT giant AvalonBay Communities (AVB). I had been following the company for years and then the stock dropped so sharply that the dividend yield spiked to over 8%. With the REIT maintaining occupancy rates above 95%, I felt that it was time to buy despite the fact that it looked like we were in the midst of financial armageddon.
I felt the same way with American Assets Trust (AAT), a diversified REIT I had followed since the start of the pandemic and purchased last month after writing about it in our mid-March 2023 update when the drop in its price had caused the yield to spike over 7%. BRT pays a quarterly dividend of $0.25 and at its current price of $19.72 has a yield of 5.07%, not quite where I would be interested but it is getting close.