The performance of publicly traded apartment REITs have been one of the primary reasons the national apartment market has been so strong the past couple of years. The 10 companies averaged 7.0% annual effective rent growth in September, a solid 179 basis points higher than the overall national rate of 5.2%.
Much of that advantage can be found when comparing REIT rent-growth rates to the overall figures in the metro markets they serve. The table below compares the REITs’ rent-growth rates to the top 17 Metropolitan Statistical Areas (MSAs), ranked by annual effective rent growth, as found in Axiometrics’ monthly Market Trends Report.
The number of properties each REIT has in the different MSAs varies – as do individual property and location specifics. But the list gives a snapshot of how the REITs compared to the average in eachof the apartment markets in September. The rate of the top-performing REIT within each MSA is in bold.
Looking at where the apartment REITs had the largest advantage over the market average may give an idea of the REITs’ relative success in each market.
- Aimco’s (AIV) 8.2% rent-growth rate in Seattle was 21 basis points (bps) higher in September than the MSA’s 8.0%.
- Avalon Bay’s (AVB) best performance relative to the market average was in Los Angeles, where AVB’s 12.3% rent-growth rate was 513 bps higher than the metro’s 7.1%.
- With a rate of 8.8%, Camden Property Trust (CPT) outperformed the 6.6% market average in Tampa by 224 bps. Tampa is one of several strong Florida markets and was new to the top 17 list in September.
- Equity Residential’s (EQR) strongest comparative results were in Phoenix, where the REIT’s 11.9% rent-growth rate was 456 bps higher than the market’s 7.4%.
- Essex Property Trust (ESS), which has had the highest annual effective rent growth among REITs for 14 straight months, outperformed the Los Angeles market rent-growth average, 11.9% versus 7.1%.
- Mid-America Apartment Communities (MAA) beat the Orlando average of 8.4% with a rate of 14.0%. This also was the strongest REIT rate for that market.
- Monogram Residential (MORE) outperformed the Los Angeles average by 180 bps with an annual effective growth rate of 8.9%.
- Milestone Apartments (MST.UN) had its strongest performance relative to Nashville’s market average (6.7%). The REIT’s rate was 12.4% in September.
- Post Properties’ (PPS) 7.0% annual effective rent growth in Tampa outperformed the market’s September average of 6.6%.
- Finally, UDR’s strongest performance relative to the market average was in Seattle. The REIT’s 11.4% rent-growth rate was 334 bps higher than the metro’s 8.0% in September. This was also the strongest REIT performance for that MSA last month.
Original post available at AxioMetrics