The impact of the global pandemic has been felt throughout the real estate investment trust (REIT) space. Some areas have benefited, such as industrial and warehouse assets, while others have seen performance fall off a cliff, such as hotels. Somewhere in between those extremes is the apartment sector, which is seeing an outflow of residents from city regions to rural areas right now. AvalonBay Communities (NYSE: AVB) is on the wrong side of that trend, but that could be a long-term opportunity.
One of the things that has long underpinned apartment landlords like AvalonBay is the simple fact that people need to live somewhere. So owning well-run and well-located properties is generally a fairly consistent business over time. Recessions can lead to occupancy declines and difficulty collecting some rent, but the variability over the longer term tends to be much less material than in other sectors in the real estate investment trust space.
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Source Fool.com