Post Properties - Bear Of The Day

Post Properties (PPS) has taken various cost-cutting steps to navigate through the national economic downturn, including layoffs and a freeze on new development starts. The company is also trying to sell more assets to increase liquidity.

As expected, the company cut its quarterly dividend to $0.20 per share, down from $0.45 per share in 3Q08. The current dividend is down to more realistic levels. The company has taken care of all 2009 debt maturities. While we like the moves the company is making, we maintain our sell rating due to macroeconomic factors.

Operationally, we think PPS will under-perform its peer group in 2009. We expect SS revenue and NOI growth to turn negative this year. As job losses mount, multi-family operators will continue to see occupancy and rental rate declines. Post reports 1Q09 results on May 4th.

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