Preferred Apartment Communities, Inc. (NYSE:APTS) Q2 2019 Earnings Conference Call Transcript

Jul 30, 2019 • 11:00 am ET

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Preferred Apartment Communities, Inc. (NYSE:APTS) Q2 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] Thank you. Your first question comes from Merrill Ross, Compass Point Research. Go ahead please.

Analyst
Merrill Ross

Hi, thank you. I'm wondering as you exit student housing and looking at your acquisition activity year-to-date and it being somewhat depressed, well, relative to maybe what I was expecting, which may have been aggressive, but then having a smaller balance sheet. I'm wondering if you open up into another vertical. Do you follow your developers into another property type or do you feel that there's sufficient opportunity in the three basic units that you have remaining?

Executive
Daniel DuPree

Merrill, this is Dan. At this point, I think we're really comfortable with the three remaining property types that we have. We have, as I in a bumbling way explained we have great talent, I think in all three of those categories. And the key to success is having the talent to execute. This will shrink the balance sheet temporarily. We have an extremely deep pipeline, I think, of multi-family projects that we're in the process of competing for and of course, in office, when we do a deal, those deals tend to be larger and Joel who has been on the retail front, has been very active in his acquisition pipeline. I think he's got over $100 million of acquisitions in the last 90 days. So I think we're going to be able to utilize the capital that we're going to get from the sale of the student housing. I think we'll be able to use it very, very quickly.

But it does kind of point to an issue that we alluded to in the comment, and that is we ended the quarter with a fairly significant amount of cash on the balance sheet. We're going to stay as disciplined as possible to not buying assets just for the sake of buying assets and deploying the capital. There are a number of historical stories in the space where people raise considerable money in the broker dealer channel and then just went out and bought whatever they could buy. We're not going to do that. We'll take our lumps, if we have undeployed capital for a short period of time. But this is a very wordy answer. I think everything I've done this morning has been very wordy. But we're going to stay with the three verticals we have right now.

Analyst
Merrill Ross

I think discipline is key. Just follow up on an unrelated matter. Is there any timetable that the external manager and the board are looking at in terms of future cut date on an internalization?

Executive
Daniel DuPree

No, I don't think we've put a time frame on it. We want to be thorough and complete. We think it is an appropriate time to take a deep look at this. But we don't have a time frame. We are being diligent.

Analyst
Merrill Ross

Thank you.

Operator
Operator

Thank you. This concludes our question and answer session.I'd now like to turn the conference back over to Lenny Silverstein for closing remarks.

Executive
Leonard Silverstein

Thank