In what was an active first quarter, with Brookfield Asset Management buying Associated Estates Corp. (AEC), Independence Realty Trust acquiring NASDAQ-traded Southeastern REIT Trade Street Residential, and rumors of a Home Properties takeout, REITs continued to extend the half-decadelong recovery.

“Apartment REITs had a strong earnings season in 1Q,” said full-service brokerage and investment banking firm Stifel Nicolaus and Co. in a research note. “Of the 10 REITs that reported, five posted accelerated same-store revenues, and five increased their same-store revenue guidance midpoints for 2015.”

Others agreed. “In 1Q15, apartment REIT operations exceeded our expectations,” GreenStreet Advisors said in its first-quarter report.

Overall, the REITs reported same-store results with revenue growing 4.7%, expenses rising 2.5%, and NOI improving 5.4%. Same-store revenue growth jumped 4.4% from the fourth quarter and 4.1% from the third quarter, according to Stifel.

Stifel noted that apartment REITs continue to run at record-high occupancy levels. The weighted average occupancy was 95.8%, which is up 30 basis points year over year and flat quarter over quarter. 

Essex Property Trust led the way, with its revenue growing 7.7% and NOI increasing 10.7%, and Equity Residential posted a revenue increase of 5.0% and an NOI jump of 7.0%. At the bottom of the list, revenue grew only 2.1% at AEC and 2.4% at Post Properties.

Essex’s strength shouldn’t be a surprise, given the performance of the REIT's core West Coast markets. “Certainly, Southern California was doing well, which is a huge positive,” says Alexander D. Goldfarb, managing director at Sandler O'Neill + Partners. “[And] Northern California is on fire.”

While a glut of supply lingers in Washington, D.C., the only truly questionable market remains Houston. “The apartment REITs’ largest market, D.C., has bottomed out; [and] Houston continued to weaken,” Green Street Advisors said in its first-quarter report.

Camden’s home base is Houston, and CEO Ric Campo contends that oil prices haven't had a dramatic effect on the market so far this year. Others agree.

“There are some questions about Houston,” Goldfarb says. “But every day that that price is sustained at about $50 a barrel, Houston fears subside.”

Outside Houston, things still look solid. GreenStreet says starts have plateaued, and the advisory forecasts a completions peak in 2015. As this happens, demand should remain. “Continued solid job growth and the unbundling of 25- to 34-year-olds living at home are expected,” it said in its first-quarter report.