Equity Residential in Chicago, the country's largest apartment owner, says it doesn't know quite how difficult things will be in 2009. That's was evident during the firm's fourth quarter conference call, when it offered a funds from operations (FFO) guidance range of $2.00 to $2.30 per share for the full year 2009.

Equity's assumptions figure that its occupancy will fall from 94.5 percent in 2008 to 93.5 percent in 2009. Right now, it's at about 94 percent. But David J. Neithercut, Equity Residential's president and CEO said that he expects things to deteriorate as job losses mount. "Revenue decreases will accelerate as the year goes on," he said.

Interestingly, as part of its revenue management plan going forward, the firm has begun removing pricing from some of the apartment properties on its Web site. The trigger for that decision came after last fall's financial meltdown, when Equity's lease revenue optimization (LRO) system began spitting out numbers that weren't sustainable.

Equity didn't indicate during the conference call whether the firm would be encouraging on-site leasing agents to disregard LRO outputs and offer higher pricing to potential residents, or if the firm was going to stick with LRO prices but wanted to avoid potential long-term negotiation challenges.

"We didn't want to market rents that weren't sustainable," said Fred Tuomi, executive vice president of property management. So far, Equity has noticed no drop off in people using the site. "We're using this opportunity to tinker with strategy," Tuomi added.

On a macro level, Neithercut, however, doesn't expect this recession to reach the nadir of the late 1980s, when oversupply pushed occupancy into the 80 percentile range. "We do expect some occupancy," he said. "But we don't expect occupancy to go past the low water marks in previous downturns."

One reason for this optimism is Equity's apparent strength, so far, in converting renewals without concessions. (Equity is offering concessions for new renters.) Its renewal rates are up in every market except New York and Phoenix, Ariz., where things are flat. In New York, the REIT sees strength in smaller units but concessions in larger, more expensive apartments. "We're not having a mass exodus from New York," Tuomi said. "People are moving around and down."

Neithercut doesn't anticipate losing residents to home ownership yet, either. "Until our residents have a better picture about the job and economic outlook, we're not expecting people to leave our units to buy homes, regardless of how low interest rates are," he said.