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As a result, we strongly favor markets that have historically exhibited highly resilient economic characteristics. Job growth ultimately fuels apartment demand. By choosing MSAs that have consistently exhibited job creation resilience during national recessions, we are positioned to produce superior consistent long-term earnings growth. What falls out of this analysis is a portfolio of six to eight markets that will enable us to achieve our performance goals. Over the next two or three years, our investment and divestment decisions will move our property mix toward this ideal portfolio. The Importance of Sub-Market Expertise While this macro geographic analysis is important, we cannot and will not lose sight of the fact that real estate investment is fundamentally a local business. Great real estate decisions cannot be made from a distance. We subscribe to the model of building our real estate investments around local market sharpshooters. Choosing the wrong sub-market can sink the best macro investment decision. Historical analysis of our existing portfolio has shown that our investments in in-fill and protected supply sub-markets materially outperform suburban investments. As such, we intend to cull our suburban assets as market conditions permit and focus our future investments in the more protected sub-markets. Capitalizing on Market Valuations Like others, we continue to be frustrated with the disconnect between Wall Street’s and Main Street’s valuation of our real estate portfolio. In this disconnect, however, lies an opportunity. |
New
Board Resources In addition to redefining Gables’ strategic
direction, our research this summer brought another great benefit
to Gables. Dr. Mike Miles, former head of real estate research
for Fidelity and the author of several of those obscure academic
works, has agreed to join our Board of Trustees. I cannot tell
you how grateful and thrilled I am to have Mike on the Board.
His contribution as we move forward with our research-based repositioning
will no doubt prove invaluable. 
In
addition to Mike, we have also added Jim Motta to our Board of
Trustees. As President of St.Joe/ Arvida Company, Jim has created
substantial real estate value for Arvida’s partners and shareowners.
Further, under Jim’s leadership, Arvida has become widely recognized
as the premier master planned community development company in
the Southeast. Jim brings a wealth of real estate and investment
expertise to our Board. 
