Though things are still solid in most rental markets, the economy was on the mind of many of the apartment REIT executives who spoke on June 4, the first day of the National Association of Real Estate Investment Trusts' (NAREIT) 2008 REITWeek Investor Forum in New York City.

"Job growth remains positive, but the rate of growth has declined," said C. Reynolds Thompson III, CEO of Birmingham, Ala.-based Colonial Properties Trust.

Others weren't quite as optimistic, speaking a couple of days before a report came out showing heavy national job loss. "We're probably in a recession," said Keith Oden, president of Houston-based Camden Property Trust, who believes that the state of the economy is much more problematic than oversupply. "Employment growth is much bigger piece of the puzzle than the overhang of single-family [housing] supply.

"Even the markets most challenged on supply, we still have 95% occupancy," Oden said. "Other things are going on than just shadow supply." Oden may be right. A few days after the event, reports showed heavy national job losses.

In Tampa, Fla., Orlando, Fla., Phoenix, Las Vegas, and Northern Virginia, Camden is seeing difficulty, with an aggregate NOI at -1 percent. The firm has positive fundamentals in eight other markets, which are producing 6 percent same-store NOI. Overall, the REIT's NOI is at a stable 2.5 percent.

"All in all it's a rocky, challenging environment," Oden said. "We have the overhang of housing supply being offset in markets that don't have supply issues and have pretty good job growth."

Like Camden, Colonial also has stronger markets carrying its weaker ones right now. The REIT has trouble in Florida -- specifically in the Orlando and Tampa markets -- but Texas is boosting its portfolio. "They're going to be the markets that help us carry the day," Thompson said.

Essex Property Trust of Palo Alto, Calif., has a similar story to tell with a West Coast spin. "We have job growth in most of our markets," said Keith R. Guericke, president and CEO of Essex.

But even if that narrow geographic market footprint, some markets are carrying others. For instance, job losses from companies such as Countrywide have hurt the REIT in Southern California. But Seattle and Northern California are coming to the rescue. Guericke thinks that will continue into 2009: "Southern California has issues on the supply side and the demand side."

But once that housing supply gets soaked up, Essex expects things to get better. Other factors -- such as troops returning to San Diego after deployment -- could also help. "The issues in Southern California are more short term in nature," Guericke said.

Alexandria, Va.-based AvalonBay Communities is experiencing similar pain and challenges in Southern California. But it's having success in other markets such as Washington, D.C. (though there's concern about condo reversions), and Boston (which is coming back after some challenging years).

But overall, AvalonBay is having success in a tricky market. It's been able to pull back concessions, and the 10 percent jump in traffic the first quarter of 2008 has held strong as the year progressed. As home owners have become renters, the REIT said it has benefited. "The change in home ownership rate is serving to benefit our portfolio," said AvalonBay CEO Bryce Blair.