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Apartment REITs See Stronger Demand, but Coastal and Sun Belt Markets Remain Worlds Apart

Apartment REITs See Stronger Demand, but Coastal and Sun Belt Markets Remain Worlds Apart

Rent growth is back for apartment REITs, but renewals and retention are carrying it.

Nina Dale
November 13, 2026

In partnership with

Good morning. Apartment REITs are seeing stronger demand and rising renewal rents, but the recovery remains uneven. Coastal markets are pulling ahead, while Sun Belt oversupply and higher interest rates continue to weigh on performance.

🎙️ This Week on No Cap: First Washington Realty CEO Alex Nyhan explains how his grocery-anchored portfolio abated less than 1% of rent through COVID, and why he won’t chase the highest-credit tenant for every box.

CRE Trivia 🧠

What everyday item was the first product ever scanned by a checkout barcode, in 1974?

IN PARTNERSHIP WITH REAL PROPERTY CAPTIVE

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*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

Market Snapshot

S&P 500

GSPC

7,592.40

Pct Chg:
-0.35%

FTSE NAREIT

FNER

848.35

Pct Chg:
-0.57%

10Y Treasury

TNX

5.127%

Pct Chg:
+0.138%

CME Term SOFR

1-Month

3.96%

Pct Chg:
-0.00

*Data as of 11/12/2026 market close.

The Sticky Middle

Apartment REITs Lean on Renewals as New Leases Soften

Apartment REITs saw improving fundamentals in Q3 2026, as strong demand and rising renewal rents supported growth despite Sun Belt oversupply and higher interest rates.

Renewals lead the recovery: Renewal rents rose 5.3% at Essex, MAA, and Vivmark, compared with 3.6% at Camden. UDR reported record-high retention of 52%, while Camden's renewal offers for December and January averaged 4.5% increases.

Demand beats expectations: Apartment absorption is on track for one of its strongest years on record, with MAA reporting leasing leads 10% to 15% above last year. As CEO Brad Hill noted, "Robust demand, coupled with lower supply levels, is beginning to translate to a more balanced operating environment."

Coastal strength, Sun Belt struggles: Northern California led with same-store NOI growth of 11.2% at Vivmark and 7.0% at Essex. Denver lagged, with NOI falling nearly 7% at Camden and MAA and 9.6% at Vivmark. Still, markets like Dallas, Atlanta, and Austin are showing signs of recovery.

Affordability offers breathing room: REIT renters remain financially healthy, with rent-to-income ratios of just 18% at MAA and 21% at UDR. Essex CEO Angela Kleiman noted that Northern California rents could climb more than 20% before returning to pre-pandemic affordability levels, even without wage growth.

Higher rates reshape investment: Camden canceled two acquisitions, a land purchase, and two developments as rising rates pressured valuations. In Nashville, the REIT purchased an existing property for roughly $370,000 per unit rather than building across the street at more than $600,000 per unit.

A shifting REIT landscape: The AvalonBay–Equity Residential merger created Vivmark, which is already outperforming initial expectations. CEO Ben Schall said, "The underlying business is performing better than expected." Meanwhile, UDR's $2 billion Apollo partnership and increased stock buybacks highlight shifting capital strategies.

➥ THE TAKEAWAY

Better fundamentals, tougher capital markets: Strong demand, rising renewals, and slowing supply are fueling the apartment recovery, but higher rates are limiting investment activity. Fewer construction starts today could set the stage for stronger rent growth in 2027 and beyond.

✍️ Editor's Picks

Claude now sources CRE deals: Terrakotta's Claude Agent is disrupting the CRE industry as we speak. Brokers can now automate LLC skip-tracing, find motivated sellers, and source off-market deals. (sponsored)
Misaimed gains: Real estate investors have scaled AI across the board, yet the sharpest gains landed in property management at 66% efficiency, not the deal-making edge they prioritized.
Volume jumps: US CRE investment volume jumped 98% YoY to $257.8B in Q3, though two mega-deals drove most of it; without them, volume still rose 18%.
Global rebound: Global listed real estate rebounded 3.6% in October, led by North America, lifting the sector 6.1% YTD as the 10-year retreated from 5.31%.
Secondaries push: Blackstone is raising a $3B fund to buy stakes in rival managers' real estate vehicles below NAV, tilting toward industrial, rental housing and data centers.
Zone reshuffle: The new opportunity zone map covers 25% fewer tracts than OZ 1.0, pushing fund managers' fresh billions toward suburbs, secondary cities and rural areas.

🏘️ Multifamily

Fee crackdown: Progress Residential will pay $49.7M to settle FTC claims it hid rental fees, the agency's largest-ever action against a landlord across its 90,000 homes.
Backlog builds: Unresolved NYC housing violations rose 3.9% YoY in October, with three in four open over a year as heat and hot-water complaints jumped 40%.
Pricing firms: National advertised apartment rents ticked up to $1,777 in October, the first October gain since 2022, as annual growth hit a three-year high of 1.4%.
Deadly collapse: A three-story Brooklyn building collapsed into an adjacent construction pit, killing at least eight and injuring 18, prompting the city to inspect dozens of nearby sites.

🏭 Industrial

Vacancy turns: US industrial vacancy fell to 7.6% in Q3, its first drop since 2022, as net absorption hit 87.5M SF and big modern warehouses led the tightening.
Storage broadens: All four public self-storage REITs grew same-store NOI in Q3 for the first time since 2024, led by SmartStop at 4.9%, as new supply thins.
Pipeline holds: Data center construction stays on track for 2027 despite anti-build midterm votes, CoreWeave said after strong Q3 earnings sent its stock up more than 26%.
Reshoring test: New tariffs on imported furniture are nudging some US makers to add domestic jobs, an early test of whether trade policy can refill shrinking factory floors.
Adaptive reuse: Self-storage is increasingly carved out of unlikely buildings, from shuttered retail to old industrial space, a cheap reuse play that sidesteps costly new construction.

🏬 Retail

Shelves fill: US retail vacancy slipped to 4.3% in Q3 as 5,800 openings outpaced 4,000 closures, with value, grocery and gym tenants backfilling empty boxes.
Traffic split: Casual-dining visits were flat in Q3, up just 0.2% YoY, yet BJ's and Cheesecake Factory grew traffic 9.3% and 7.6%, rewarding the sharper operators.
Mall distress: A $235M CMBS loan on New Jersey's 1.15M SF Bridgewater Commons mall hit special servicing, set to default at maturity despite a recent $3.4M paydown.
Prime refi: Simon and Prime are closing a $555M refinancing on Miami's Dadeland Mall, valued at $909M, returning nearly $200M of equity on $892M in annual sales.

🏢 Office

Absorption streak: US office leasing reached 62M SF in Q3, up 18% YoY, a sixth straight quarter of positive absorption as vacancy slipped 50 bps to 19.8%.
Credit trade: A 49,560 SF San Francisco lab fully leased to Google through 2030 traded for about $28M, a sign discounted credit-tenant office is drawing buyers back.
Footfall steady: Office foot traffic held its recovery through October despite fewer workdays, with Boston posting the strongest annual gain though visits stay well below 2019.
Occupancy lift: RFR landed a $101M refinancing on its Downtown Miami office tower after lifting occupancy from under 60% to about 90% since its 2022 purchase.

🏨 Hospitality

Advisory cut: Braemar cut its Ashford advisory deal to become a self-managed REIT, capping a selloff that shed the Four Seasons Scottsdale and Pier House Key West.
Visitors fade: International visitor spending is forecast to fall $11B this year, down 6.3% to about $163B, as foreign arrivals keep trailing their pre-pandemic peak.
Boston buy: EOS Investors bought the 163-room Hyatt Centric Faneuil Hall for about $58.6M, its first Boston hotel, adding to a growing Hyatt Centric collection.

📈 CHART OF THE DAY

The 10-year Treasury yield reached 4.98% in October 2026, nearly 100 basis points above the Fed funds rate, highlighting how borrowing costs remain elevated and continue to reshape commercial real estate investment decisions.

CRE Trivia (Answer)🧠

A pack of Wrigley's gum. A Troy, Ohio clerk rang up a 10-pack of Juicy Fruit on June 26, 1974, the first UPC barcode sale.

Apartment REITs See Stronger Demand, but Coastal and Sun Belt Markets Remain Worlds Apart

Rent growth is back for apartment REITs, but renewals and retention are carrying it.

CRE Trivia 🧠