- Q1 2025 results for major multifamily REITs outperformed projections, driven by strong occupancy, resilient rent growth, and improved collections.
- Coastal REITs such as AvalonBay, Essex, and Equity Residential are ramping up development, while Sun Belt REITs like Camden, MAA, and UDR focus on strategic operational improvements amid residual supply pressures.
- Most REITs reaffirmed 2025 guidance, with stronger lease growth expected by Q3 as Sun Belt supply constraints begin to ease.
Q1 Outperformance Across the Board
According to RealPage, multifamily REIT performance exceeded expectations in early 2025, driven by strong demand and improved rent collection. Coastal portfolios saw higher occupancy and reduced vacancy. AvalonBay, Essex, and Equity Residential all reported solid gains.
Coastal REITs Lead in Development
AvalonBay saw higher occupancy and less available inventory. Essex improved rent collection, with delinquencies in Los Angeles dropping from 3.9% to 1.3%. Equity Residential recorded 96.5% occupancy and the lowest resident turnover in its history. New York, Seattle, and San Francisco were top performers.
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Sun Belt REITs Focus on Efficiency
Sun Belt REIT performance held steady, with Camden, MAA, and UDR keeping pace despite lingering supply challenges. Camden reported 95.4% occupancy and better leasing activity. MAA showed a slight dip in rent but better collections and stable occupancy. UDR reported its lowest turnover in over 10 years, thanks to improved leasing and resident retention.
REITs Ramp Up Investment
With market confidence up, REITs are investing again. AvalonBay plans $1.6B in new development this year, targeting suburban and fast-growing regions. Essex made $345M in Northern California buys, funded by selling Southern California assets. Equity Residential kept its $1.5B acquisition plan intact.
Camden began a $184M project in Nashville and aims for $750M in acquisitions and sales. MAA expects to invest another $305M over the next few years. UDR sold two New York assets for $211.5M and started a new project in Riverside, California.
Stable Guidance Despite Economic Concerns
Most REITs kept 2025 guidance unchanged. AvalonBay said it will adjust plans as needed, while Essex voiced confidence in rental housing. Camden, MAA, and UDR also held steady.
Sun Belt REITs expect rents to rise again in Q3. MAA projects gains as new supply slows. UDR echoed that view, with stronger leasing likely in the second half of the year. Camden expects Austin and Nashville to recover by late 2025.
The Bottom Line
REIT performance remained strong entering 2025, with resilient demand and the worst of the supply wave largely behind. Coastal REITs are building again. Sun Belt REITs are optimizing operations. With stability returning, the outlook for the rest of 2025 is solid.
