Aimco’s Gets Favorable Verdict Against Airbnb Proceeding
The lawsuit of Apartment Investment and Management Company AIV — better known as Aimco — against Airbnb, which alleged that the short-term rental website has allowed tenants to violate their lease agreements through unauthorized subleases, has proceeded in the Florida court.
Further, the court dismissed Airbnb’s premise which was supposedly protected by the Communications Decency Act. Per the act, online-service providers are protected from the responsibility for the content users’ actions.
Aimco alleged that its high-end apartment communities’ tenants in Los Angeles complained about noisy Airbnb tourists and therefore more security staff had to be employed for property monitoring, tracing and expelling of unlawful Airbnb guests. Per the court, the company was right to claim compensation due to increased expenses because of enhanced security, damage caused to their properties and reduction in value of the properties. Further, the court allowed Aimco to put a perpetual ban if they succeed at the trial.
Cindy Lempke, Aimco‘s spokesperson informed, “Aimco will vigorously pursue its remedies for Airbnb’s illegal use of our properties that disrupts the residential living experience, tramples on private property rights, and reduces affordable housing options for middle class renters. We are confident that we will be successful in our efforts to stand up for working families who need housing and want to maintain a tranquil home life, free from the intrusions that are created by illegal short-term rentals.”
Though this verdict by the court is favorable for Aimco, elevated apartment supply remains a concern for the company. Particularly, new supply is competing with some of Aimco’s higher rent properties. This high supply in a number of the company’s markets is a concern because it curtails landlords’ ability to command more rent and result in lesser absorption.
In the past six months, shares of the company edged down 8.1% against the industry’s decline of 8.4%.
Aimco currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
A few better-ranked stocks from the REIT space include Arbor Realty Trust ABR, Extra Space Storage Inc. EXR and Sotherly Hotels Inc. SOHO. All three stocks carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arbor Realty Trust’s Zacks Consensus Estimate for 2018 funds from operations (FFO) per share remained unchanged at 90 cents over the past month. Its shares returned 2.4% in three months’ time.
Extra Space Storage’s FFO per share estimates for the current year moved up 2% to $4.59 in a month’s time. Its shares gained 0.7% over the past three months.
Sotherly Hotels’ FFO per share estimates for 2018 was revised upward approximately 1.9% to $1.05 over the past month. The stock gained 9.3% during the past three months.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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