Jim Sullivan, managing director of BTIG, an institutional brokerage firm based in San Francisco, has increased his earnings estimates for Equity Residential and UDR in a new research note about apartment REITs and markets.

Sullivan expects new apartment supply in most of the nation’s major apartment markets to peak as the year comes to a close, then flatten or even fall slightly in 2019. Pockets of increasing supply may persist, he says, but demand is expected to remain strong.

Rent growth is expected to climb for every apartment REIT in BTIG’s coverage, according to Axiometrics, noting that overall trends are stable and improving in supply-challenged markets.

EQR’s Q3 results cited 5.1% growth in renewal leases, as well as historically low turnover. Sullivan considers this a positive sign for apartment demand, as renters are choosing to remain in their units and accept higher rates.