David Stockert, president and CEO of Post Properties (NYSE: PPS), joined REIT.com for a CEO Spotlight video interview at REITWorld 2012: NAREIT’s Annual Convention for All Things REIT at the Manchester Grand Hyatt in San Diego.
Stockert was asked about how impact of Post Properties’ focus on class-A properties in the Sun Belt region has impacted the company’s performance recently.
“I think our performance is a combination of being in the Sun Belt markets, which tend to do relatively well coming out of a recession,” said Stockert, who noted that the region features a low cost of doing business and cheap housing. He also said Post Properties’ customers tend be young professionals, which highlights the appeal of its properties being located in in-town, infill locations within those cities.
Stockert discussed the interplay of the residential housing recovery and apartment markets.
“We can’t really do much about the fact that if somebody gets married, thinks about having kids, thinks about a school system, they’re going to be likely to move into a single-family home. That’s not something we can provide for them,” Stockert said. “In the meantime, we’re going to take care of them with great service. People are tending today to delay that decision a little more for a variety of reasons that a lot of people know about. In terms of what we do with our company to be ready for different parts of the housing cycle, one is pay close attention to the balance sheet and make sure that we’re strong in that way. Today we’re still early in the new delivery cycle of housing, generally, so we’ve been early with the new development pipeline. We should deliver those units at an attractive time in the cycle with good rent prospects and good occupancy prospects.”
Stockert addressed some of the changes currently facing the multifamily sector.
“I think as an industry we’re a lot smarter about thinking about our business in the totality of the housing market generally. There is more development of multifamily apartments—it’s the hot sector,” he said. “We’re going to overbuild certain submarkets, but I don’t think it’s going to be such that it ruins everything more broadly across the board. We’re not to that point.”