Daniel DuPree, chairman and CEO of Preferred Apartment Communities, Inc. (NYSE: APTS), participated in a video interview at Nareit’s REITweek: 2018 Investor Conference in New York.
Preferred Apartment Communities’ primary asset type has been class-A multifamily in markets with more than one million people and good job growth. The REIT acquired $1.1 billion in assets since the beginning of 2017, but then began to pivot.
“We then diversified into grocery-anchored retail,” DuPree said. “We thought there was an opportunity within the retail space if we narrowly defined the product type as the number one and number two grocer within a market [in] the Sunbelt.” DuPree defined that targeted geographic area as “Virginia down through Georgia, Tennessee, and then over to Texas,” with Kroger and Publix the primary grocer targets.
“It basically creates a bit of a hedge against variations in the multi-family market where longer-term leases [exist],” DuPree said.
Preferred Apartment Communities’ loan investment program plays an important role for the company as well. “We invest our money differently. We wanted to participate in the value creation of development,” DuPree said.
DuPree said the company’s “very well-defined market” in the Sunbelt is the primary reason it’s thriving within the grocery channel. “If you take a look at demographics and where the growth of the country has been over the last 20 years, and where it is projected to be over the next 20 years, [it’s] the Sunbelt,” he said.