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December 2017 REIT Report

Apartment REIT Performance Mimics National Trend

 Following the trend of the overall national apartment market, annual effective rent growth for publicly traded apartment REITs climbed incrementally in December to reach its highest point of the year, while occupancy remained tight.

REIT rent growth of 1.7% in December marked a 13-basis-point (bps) increase over November’s 1.6% and was the highest rate since August 2016. The latest figure was 75 bps higher than the 1.0% of December 2016.

Apartment REIT rent growth chart

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The chart above shows that REIT and national rent-growth rates have traveled similar paths over the past 15 months, with steadiness and moderate gains common. The REITs have underperformed the overall market since March 2016, as the REITs’ drop in late 2015 and early 2016 was steeper than the nation’s.


The Metropolitan Statistical Areas and Metropolitan Divisions among Axiometrics’ Top 50 apartment markets with the highest annual effective rent growth in November were:

  • Las Vegas, NV (6.3%)
  • Orlando, FL (6.3%)
  • Sacramento, CA (6.3%)
  • Richmond, VA (6.1%)
  • Jacksonville, FL (5.3%)
  • Riverside, CA (4.7%)
  • Houston, TX (4.4%)
  • Phoenix, AZ (4.4%)
  • San Diego, CA (3.7%)
  • Columbus, OH (3.6%)


MSAs underperforming the national average included:

  • Philadelphia, PA (2.2%)
  • Seattle, WA (2.1%)
  • Boston, MA (1.7%)
  • Dallas, TX (1.7%)
  • Portland, OR (1.5%)
  • New York, NY (1.5%)
  • San Francisco, CA (0.8%)
  • Chicago, IL (0.6%)
  • Washington, DC (0.6%)
  • Austin, TX (-0.8%)

REIT Occupancy Outperforms December 2016

While a slide in year-over-year occupancy rates was a compelling story earlier in 2017, REIT occupancy continued to outperform the national rate by a wide margin, and December’s rate was again the highest among corresponding months during this decade.

REIT portfolios were 95.9% occupied in December, essentially the same as November and 14 bps higher than the December 2016 rate of 95.8%. REIT occupancy was 137 bps ahead of the national occupancy rate, 94.5%.

Apartment REIT occupancy chart

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Year-to-date (YTD) REIT rent growth was 1.8% in December, 68 bps lower than November’s 2.5% as the annual year-end dip continued, according to the apartment rental data. The 2017 YTD growth was the second lowest in the post-recession era, 72 bps ahead of the 1.1% of 2016, but 89 bps below the third lowest year, 2013.

Apartment REIT rent growth YTD total chart


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Apartment REIT rent growth December YTD


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December’s YTD rent growth was 213 bps below the post-recession December average of 3.9%. 

Apartment REIT Rent Growth vs. average

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Aimco Takes Over No. 1 Position

A rent-growth surge of 181 bps in December lifted Aimco (AIV) to the highest annual effective rent growth among the publicly traded apartment REITs, with a year-over-year rate of 3.9%

The increase propelled AIV past previous leader Camden Property Trust (CPT), whose rent growth fell for the first time in six months, to 3.2%. UDR was a distant third at 2.0%

Aimco also recorded the highest average trailing 12-month rent growth, 2.1%, followed by CPT’s 1.7% and Avalon Bay’s (AVB) 1.6%.

Essex Property Trust (ESS) had the highest REIT occupancy rate, 96.5%, followed by UDR’s 96.2% and Equity Residential’s (EQR) 96.1%.

Apartment REIT rent growth by REIT


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