With New York-based commercial real estate research firm Real Capital Analytics (RCA) saying the apartment industry’s transaction pace in the multifamily has increased for the fifth consecutive month, REITs continue to add assets.

The REIT acquisition beat continued this week with Chicago-based Equity Residential announcing it had bought a 40-story high-rise with 679 apartment units, 26,425 square feet of retail space, and 968 underground parking spaces in downtown San Diego.

The buy wrapped up a frenzied September where public apartment firms, led by some mid-sized players, made buys all over the map. But they weren’t alone—RCA says sales of significant apartment properties totaled $2.6 billion in August. That was better than July’s figure by more than 25 percent.

Look at the REIT scorecard. On Sept. 7, Denver-based UDR bought 1,614 residential units in three states for $455.1 million. The move pushed the company into Boston, which remained a relatively strong market throughout the downturn. A day later, AvalonBay Communities purchased a 628-unit property in Tustin, Calif., for $98.5 million.

Even the mid-sized and smaller REITs have been buyers. In fact, in some cases, they have been more aggressive than their larger brethren. In the past two months, Memphis-based Mid-America Apartment Communities announced five purchases—with an additional one coming by the end of September. In August, San Francisco-based BRE Properties bought a 226-unit property in San Jose, Calif.; a 500-unit property in Marina del Rey, Calif.; and 2.4 acres of land in downtown Sunnyvale, Calif. Meanwhile, Rochester, N.Y.-based Home Properties secured two properties in Baltimore earlier this summer and a 247-unit deal in Sterling, Va., in August. Even Cleveland-based Associated Estates Corp., the smallest of the apartment REITs, got into the act, buying a 504-unit property in Ashburn, Va., two weeks ago—further expanding into the Mid-Atlantic.

“Pretty much everyone across the space with capacity has been active,” says Andrew J. McCulloch, an analyst for Green Street Advisors, a Newport Beach, Calif.-based consulting and research firm. “They weren’t as aggressive as Equity was [early on]. But they’ve been aggressive recently.”

Picking Up Distress
The Equity buy continues a recent trend of REITs buying buildings that had been intended as condos. Earlier this year, Palo Alto, Calif.-based Essex Property Trust bought a couple of condo deals. In August, Mid-America scooped up the Hue, an upscale 208-unit apartment community unit former condo building in downtown Raleigh, N.C.

“It’s at very good location,” says Al Campbell, Mid-America’s CFO. “It’s a good rental product for the price that we bought it. They sold less than 20 [units], and the buyers turned the deposits back over.”

While it may appear that fallout from the condo market could be slowing down, Campbell says there are still lots of opportunities out there. “There’s quite a bit if stuff that’s pretty distressed,” he says. “There a lot of distress. Whether it’s a broken condo or high-end product, I think there’s pressure.”

And for REITs, with their ample access to liquidity and strong balance sheets, this could only create more buying opportunities. “I think there will be great opportunities for people who have the balance sheet,” Campbell says.

In fact, Dan Fasulo, managing director for Real Capital Analytics,  sees everyone buying a lot through the end of the year. “I expect transaction volumes to increase significantly through the year and into 2011,” he says. “A lot of investors are ready to go again.”

And that means REITs could see even up more competition as they look for deals throughout the year. “We’re not alone in appetite for product,” says Home CFO David Gardner.