Amid overall economic uncertainty—centered around consumer confidence challenges and tariff policy—public real estate investment trusts (REITs) posted generally positive results in the fiscal first quarter while maintaining optimism for the multifamily sector for the duration of 2025.
Among the drivers of optimism is the relative affordability of renting compared with owning. AvalonBay noted rent-to-income ratios for its renters below pre-COVID levels in its established markets. At the same time, Tom Toomey, chairman and CEO of UDR, noted renting an apartment remains on average 60% more affordable than owning a single-family home in the company’s operating markets, the best level of relative affordability in two decades. Angela Kleiman, president and CEO of Essex Property Trust, said the cost to own compared with renting in the REIT’s operating markets “remains prohibitive at over 2.5 times more expensive.”
A result of the affordability equation is lower resident turnover and strong occupancy rates. Equity Residential’s first quarter resident turnover was 7.9%—the lowest in company history—while its occupancy rate was 96.5%. MAA president and CEO A. Bradley Hill said the percentage of residents accepting renewal offers exceeded 2024’s record level. Slower turnover for the public REITs is also a mitigating factor against supply pressure, with fewer units coming to market. Lease breaks, unit transfers to lower-rent units, and rising delinquencies—all indicators of consumer weakness in the economy—are largely absent from the market.
With the landscape surrounding tariffs shifting on a near daily basis, public REITs commented that tariffs have yet to begin impacting the multifamily operating environment. However, companies such as AvalonBay, Equity Residential, and Camden Property Trust project costs will likely increase between 2% and 5% when tariffs on imported materials are implemented.
“While this is a meaningful increase and could be enough to tip some projects into being infeasible, these potential headwinds, which vary from project to project, are currently, in most cases, being more than offset by the larger macro backdrop of declining start activity,” Benjamin Schall, president and CEO of AvalonBay, shared during the company’s earnings call.
Several REITs also shared updates and results of technology investments in the first quarter.
Equity Residential is in the process of expanding the deployment of its conversational artifical intelligence (AI) capabilities across the entire leasing journey for prospective renters. The rollout is designed to reduce manual tasks, accelerate leasing cycles, and improve the prospect experience. The company projects that by the first quarter of 2026 the process from initial inquiry to lease signing will be entirety automated, giving customers the option to work with the Equity team members as much or as little as they choose. MAA and Elme Communities are both in the process of rolling out propertywide Wi-Fi initiatives.
During the first quarter, Veris Residential enhanced its MyVeris app to provide comprehensive operational functionalities from move-in to renewal. The app has already been adopted by 65% of units despite launching late in the first quarter. For renters, the app allows digital rent payments, maintenance requests, reservations of amenity spaces, and messaging with other residents.
Quarterly Results
AvalonBay reported core funds from operations (FFO) per share of $2.83 in the first quarter, a 4.8% increase from the same period in 2024. Core FFO increased $0.03 on a sequential basis from the fourth quarter of 2024. Fourth quarter same-store revenue and net operating income (NOI) increased 3% and 2.6% year over year, respectively.
In the first quarter, Equity Residential’s FFO per share was $0.94, 8% higher than a year ago. Same-store revenues increased 2.2%, while same-store NOI increased 1.3% compared with the first quarter of 2024.
Camden Property Trust posted core FFO per share of $1.72 in the first quarter, $0.02 above its results in the same period in 2024. Same-store revenues for the REIT grew 0.8% year over year and 0.4% sequentially. Same store NOI increased 0.9% year over year but was down 0.5% sequentially.
UDR reported FFO per share of $0.58, down $0.02 from the same period a year ago and below the REIT’s first quarter guidance of $0.60 to $0.62. Same-store revenue and NOI grew 2.6% and 2.8%, respectively. On a sequential basis, same-store revenue was up 0.5%, while same-store NOI decreased by 0.9%.
At Essex Property Trust, core FFO per share increased 3.7% year over year to $3.97 in the first quarter. The REIT achieved same-store revenue and NOI growth of 3.4% and 3.3%, respectively, compared with the first quarter of 2024. On a sequential basis, same-store revenue and NOI improved 1.6% and 0.9%, respectively.
At MAA, first quarter core FFO per share decreased $0.02 on a year-over-year basis to $2.20. Same-store revenues increased 0.1% compared with the first quarter of 2024, while same-store NOI decreased by 0.6% in the same period.
Elme Communities posted core FFO per share of $0.24 in the first quarter, an increase of $0.01 compared with the first quarter of 2024. Same-store NOI increased 5.5% compared with the prior-year quarter.
Veris Residential reported core FFO increased $0.02 on a year-over-year basis to $0.16 in the first quarter. Same-store NOI increased 3.2% compared with the prior-year period for the REIT.
Management Commentary and Outlook
“Recognizing that we are in a period of heightened uncertainty regarding the impact of policy actions on the broader economy, I want to emphasize that we are very well positioned, given our portfolio makeup, our unique set of strategic capabilities, and our preeminent balance sheet, to continue to deliver superior earnings growth for shareholders. … Rental affordability has improved in our established regions, given solid income growth in recent years, resulting in rent-to-income ratios below pre-COVID levels. The relative affordability of renting compared to home ownership, given both elevated home values as well as mortgage rates, continues to provide a favorable backdrop for our operating fundamentals.” —Benjamin Schall, president and CEO, AvalonBay
“Equity Residential will continue to benefit from powerful supply and demand tailwinds that favor the rental housing sector, including the long-term undersupply of rental housing in our markets, the high cost and low inventory of single-family-owned housing, and demographic and social factors that are driving increased rental housing demand, especially for our higher-quality communities located in our country’s most desirable metro areas.” —Mark Parrell, president and CEO, Equity Residential
“Today’s economic uncertainty is not new for us. We have positioned our company to do well in all market conditions with a strong balance sheet, a geographically diverse portfolio, and a great team. We’re in the Sun Belt, [and] that’s where the growth is. The Sun Belt has historically weathered tougher economic conditions better and bounced back faster than other markets.” —Richard Campo, chairman and CEO, Camden Property Trust
“Irrespective of how the macroeconomic and geopolitical environment may unfold, we remain strategically focused on drivers of growth that differentiate us from our peers and that we control. First, innovation. This is evident in the results from our value-add initiatives, which have consistently grown in the high single-digit range and added 50 or more basis points to our same-store NOI. Second, we listen to our associates and residents and use that feedback to influence our operating tactics and long-term strategy.” —Tom Toomey, chairman and CEO, UDR
“The lack of clarity on the U.S. and global trade policy have led to macroeconomic uncertainty, including the impact on business investment and job growth. As we navigate this complex environment, we will be nimble with our operating and investment strategy. … Ultimately, the West Coast multifamily fundamentals are well positioned for a wide range of economic outcomes. Total new housing supply delivery as a percentage of stock in 2025 is exceptionally low in Essex markets and is expected to moderate throughout the year and to decrease further in 2026.” —Angela Kleiman, president and CEO, Essex Property Trust
“We are encouraged by the resilience our portfolio has displayed in the face of the unprecedented levels of new supply that we’ve experienced over the past years, as well as our positioning to capture continued improvement as we enter the summer leasing season. We are seeing encouraging signs that indicate leasing conditions are poised to support stable occupancy and improvement in blended lease rates that align with the outlook that we provided in our prior guidance.” —A. Bradley Hill, president and CEO, MAA
“While the new administration continues to work to streamline the federal workforce, the fundamentals that we are seeing across our Washington metro remain solid and in line with seasonal norms. Looking ahead, apartment tour volumes and renewal lease negotiations for June and July expirations remained strong, in line with our expectations. While we acknowledge that the region could be impacted by employment losses and a slowdown in economic growth, our mid-market rent levels and geographic focus on Northern Virginia put us in a better position than higher-end rentals and the broader regional housing market overall.” —Paul McDermott, president and CEO, Elme Communities
“During the first quarter, Veris Residential continued to achieve strong operational results while advancing the corporate plan announced earlier this year. With a combined $79 million of non-strategic asset sales either closed or under binding contract, we continue to unlock value embedded within the company, despite elevated levels of market volatility.” —Mahbod Nia, CEO, Veris Residential
