The mantra in the apartment industry this year has been to keep heads in beds. From the looks of the third quarter results, it looks as though the REITs are leading the way. All 12 major apartment REITs reported occupancies above 93 percent.

This came as a surprise to Rod Petrik, managing director of St. Louis-based Stifel, Nicolaus and Co. “It surprises me how high the occupancies stayed with the apartment REITs,” he says. “I think there’s been a huge focus on turnover and trying to get to the resident early before the lease expires to keep people put.”

Some of the public firms seemed less concerned about maintaining high occupancies than others, though. “Camden [which reported occupancies at 93.7 percent] has said they’re starting to see pockets where they can push rents a little bit and that they’re willing to give up a little bit of occupancy to maximize revenue,” says Paula Poskon, a senior research analyst with Milwaukee-based Robert W. Baird. “That’s why their occupancy is below their peers.”

On the other end of the spectrum is Palo Alto-based Essex Property Trust, which has kept its occupancies at 97 percent. Green Street Advisors, a Newport Beach, Calif.-based REIT consulting and research firm says Essex is “maintaining higher than average occupancy levels (i.e., reducing market rents to keep occupancy high) in preparation for both the seasonally weaker winter months and the lingering effects of more job losses on market rents.”

But Essex and other companies are paying a price to keep their occupancies high. The Wall Street Journal reported that Chicago-based Equity Residential and Alexandria, Va.-based AvalonBay Communities said new residents in the third quarter paid 9 percent to 10 percent less rent than previous residents. Rochester, N.Y.-based Home Properties saw occupancies move down very slightly—from 95.1 percent to 95 percent—but monthly rental rates decreased half a percentage point.

Ultimately, that led to a revenue decrease of 3.7 percent and an NOI decline of 5.8 percent across the industry, according to Green Street. Still, Poskon thinks things could have been worse. “The fiscal results for 2009 will be a blended average of performance that’s not that bad and declined throughout the year,” she says. “2010 will be a timeframe where we sit at the bottom. We’ll have a full year of slipping along the bottom.”

Green Street expects an ugly 2010 as well. “Besides expense growth numbers trending a little better than prior expectations, third-quarter results did little to change our outlook for fundamentals through 2011, which calls for peak-to-trough NOI declines of 13 percent for the sector,” the firm said in a recent report.