Apartment property trust MAA to buy Colonial Properties for $2.17 billion

Published June 03, 2013

Reuters

Real estate investment trust Mid America Apartment Communities Inc said it would buy rival Colonial Properties Trust for about $ 2.17 billion to expand in the apartment rental market in southern United States.

U.S. apartments rents are rising and vacancy rates are falling as the economy improves. The apartment vacancy rate fell by 0.2 percentage points to 4.3 percent in the first three months of 2013 – the lowest in more than a decade.

The acquisition will give MAA an asset base of about 85,000 multifamily units in 285 properties across in the Sunbelt, the company said on Monday.

After the deal, MAA’s 10 largest markets will be Dallas/Fort Worth, Atlanta, Austin, Raleigh, Charlotte, Nashville, Jacksonville, Tampa, Orlando and Houston.

Under the deal, MAA will offer 0.36 common shares for each Colonial Properties Trust unit.

Based on MAA’s closing share price of $ 67.97 on Friday, the offer of $ 24.47 per share represents an 11 percent premium to Colonial Properties’ Friday close.

The combined company is expected to have a pro-forma equity market value of about $ 5.1 billion and a total market value of $ 8.6 billion, MAA said.

Colonial Properties Trust shares were up 5 percent at $ 23.31 in morning trade on the New York Stock Exchange. MAA shares were down more than 3 percent at $ 65.70.

(Reporting by Bijoy Koyitty in Bangalore; Editing by Saumyadeb Chakrabarty)

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Apartment property trust MAA to buy Colonial Properties for $2.17 billion

Half of Detroit Properties Have Not Paid Taxes; Update on Detroit Bankruptcy

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The hollowing out of Detroit is nearly complete. All that’s left is a bankrupt shell of a city with no services and scattered citizens that do not pay taxes.

The Detroit News reports Half of Detroit Property Owners Don’t Pay Taxes

Nearly half of the owners of Detroit’s 305,000 properties failed to pay their tax bills last year, exacerbating a punishing cycle of declining revenues and diminished services for a city in a financial crisis, according to a Detroit News analysis of government records.

The News reviewed more than 200,000 pages of tax documents and found that 47 percent of the city’s taxable parcels are delinquent on their 2011 bills. Some $ 246.5 million in taxes and fees went uncollected, about half of which was due Detroit and the rest to other entities, including Wayne County, Detroit Public Schools and the library.

Delinquency is so pervasive that 77 blocks had only one owner who paid taxes last year, The News found. Many of those who don’t pay question why they should in a city that struggles to light its streets or keep police on them.

“Why pay taxes?” asked Fred Phillips, who owes more than $ 2,600 on his home on an east-side block where five owners paid 2011 taxes. “Why should I send them taxes when they aren’t supplying services? It is sickening. … Every time I see the tax bill come, I think about the times we called and nobody came.”

Update on Detroit Bankruptcy

Detroit is financially and morally bankrupt yet the governor refuses to make that declaration. A Review team says Detroit faces financial crisis, has no plan to fix it so why won’t the governor act?

For the second time in a year, a state review team has found Detroit is in a financial emergency that requires Gov. Rick Snyder to intervene in City Hall.

But this time, if Snyder agrees that a financial emergency exists, the governor’s choices are more limited. He could appoint an emergency manager to keep Michigan’s largest city from plunging into bankruptcy, experts say, or he could continue state financial supervision through a new consent agreement, which seems a faint possibility.

State Treasurer Andy Dillon ruled out a bankruptcy filing at this time.

The six-member review team unanimously concluded in a report released Tuesday that the city failed to restructure its debt-laden bureaucracy under the financial consent agreement signed in April and that Detroit’s financial crisis requires Snyder’s intervention “because no satisfactory plan exists to resolve a serious financial problem.”

Chapter 9 bankruptcy is “always a possibility but I don’t think the city should go through (Chapter) 9 to cure its ailments,” he added.

The review team said the city’s charter adds “numerous restrictions” and hurdles for closing departments, canceling contracts and the type of wholesale restructuring financial experts say is necessary to make city government live within its means.

Restrictions? Who Cares?

In bankruptcy, restrictions go out the window. So do union contracts and pensions. Since all of that needs to go out the window, what’s holding the governor back?

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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Half of Detroit Properties Have Not Paid Taxes; Update on Detroit Bankruptcy