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10 Themes & Highlights from Q3'25 Apartment REIT Earnings Calls
An early end to the leasing season, myth-busting on renter financial health, stock buybacks, "green shoots" in the Sun Belt, a boom in the Bay Area, and much more.
Jay Parsons
November 07, 2025
Today’s edition sponsored by: JPI, Authentic, Utility Profit and Madera Residential.
I have a love/hate relationship with the REITs’ earnings call season. I love it because the REITs always offer up great color on the market. I hate it because … well … it’s a lot of work to go through hours and hours and hours of earnings calls!
But it’s worth it. And hopefully my pain is your gain, as I’ve cut through the noise and the pleasantries and jargons to share my Top 10 Takeaways from the apartment REITs’ Q3 2025 earnings calls. However, I should note one prominent REIT — Camden — has its call today, so we haven’t yet incorporated it but will add some takeaways in the next newsletter, which will otherwise focus on the SFR REITs’ calls.
Also, if you’re more of a podcast listener than a newsletter reader (hopefully both!), check out this week’s podcast breaking down FIVE key takeaways (bonus of five more in newsletter edition) with special guest Haendel St. Juste, a managing director and senior REIT analyst at Mizuho Americas.
REMINDER: None of this is investment advice whatsoever, so please don’t interpret it as such. I’m just sharing things from earnings calls that I find interesting.
ALSO: If you’re interested in extended highlights from the 12 individual apartment REITs (with semi-removal of Elme), I’ve posted those on X (i.e. Twitter), and you can find those here (in order by market cap):
AvalonBay (AVB)
Equity Residential (EQR)
Essex (ESS)
MAA (MAA)
UDR (UDR)
Camden (CPT) — COMING SOON
Veris Residential (VRE) — COMING SOON
Centerspace (CSR) — COMING SOON
NexPoint (NXRT) — COMING SOON
BSR (BSR) — COMING SOON
Clipper Realty (CLPR) — COMING SOON
Ten Themes & Highlights from Q3’25 Earnings Calls
(CONTINUED BELOW…)
#1 - Did the leasing season end earlier than usual in 2025?
It depends who you ask, but more than a few REITs said leasing slowed down in the latter half of Q3 – especially in September, and that softness extended into October.
However, several REITs also said the 2025 leasing season STARTED earlier this year, too – suggesting the cycle just moved up a month. And it’s certainly true that Q1 was abnormally hot (inspiring, at the time, bullishness for 2H’2025 that didn’t pan out).
And let’s be real: We haven’t seen a lot “normal” seasonal patterns since pre-COVID, so we want to be careful not to read too much into the September slowdown. We may not get a clearer signal on leasing momentum until March/April, since the cold-weather months are almost always slow even when the economy is booming.
“The best way to think about this is for us to say that our normal pattern of a seasonal decline in traffic began one month earlier than usual. In fact, everything this year feels like it was pulled forward. The leasing season started earlier than usual and peaked earlier than usual just as the normal seasonal pattern of traffic decline began earlier than usual.”
“The leasing season started a little earlier, ended a little earlier.”
“We started to experience some softening in key revenue drivers during the quarter. Economic occupancy was generally consistent with our expectations in July and August, but fell below our previous outlook in September and has continued to be below our previous expectation for October. Similarly, rent change started to trend below our midyear outlook in August, driven primarily by weaker move-in rents.”
UDR’s Michael Lacy said retention rates are still improving, occupancy is still high but rents “decelerated beyond typical seasonality, which we largely attribute to the economic uncertainty.”
#2 - REITs say current renters are still in financially strong shape
Any time there’s any sign of sputtering in the economy, there’s a rush among doomer types to suggest renters are in dire straits. But every single REIT reported strong financial health among renters – improved bad debt (rent delinquency), low/improving rent-to-income ratios, growing incomes among new lease signers and high retention.
Several REITs also said they saw no pickup in move-outs attributed to job losses, nor did they see any material pickup in lease breaks.
“Incomes continue to rise (up 7% among their new lease signers). Rent-to-income ratios are staying pretty steady. I think we’re at 22%. So our bad debt has held really low, which is great. So we feel great about the health of the renter.” Olson also said “there's really no evidence that people are starting to double up.”
“We see our existing residents as having a generally stable employment situation and good wage growth. We see continued improvements in delinquency and no other signs of customer financial stress. We have also seen incomes rise for our new residents by 6.2% year-over-year.”
MAA’s Brad Hill said they’re seeing strong rent collections and higher incomes, taking rent-to-income ratios to 20%.
#3 - But prospective renters are “cautious” and commitment-phobic right now
Most REITs said that while current renters are doing just fine, prospective renters are nervous and cautious. That corresponds, not surprisingly, with a consumer sentiment score BELOW 2009 levels … even though unemployment was >2x higher back then.
In times of uncertainty, what is human nature? To do nothing. Uncertainty has a freezing effect on major decisions, including lease signings, and REITs are seeing that in real time.
Speaking of D.C. but likely true elsewhere, too, EQR’s Michael Manelis said it well: “There was just a little less sense of urgency to buy and sign on the dotted line and commit to move-in dates. So that manifested itself as we worked our way through September into October with just a lower volume of new leases occurring. The retention side held up strong. We're not seeing kind of folks that lost their job with the government turning in keys. We're not seeing kind of any of this increase in lease breaks. You're just seeing an overall slowdown in the top of the funnel and this willingness to commit to a lease.”
We’re seeing “a very cautious customer… And you can see that from the time we send out a notice to the length of time it takes them to respond to the traffic patterns, how long they spend on our (property websites).”
“There was just a little less sense of urgency to buy and sign on the dotted line and commit to move-in dates. So that manifested itself as we worked our way through September into October with just a lower volume of new leases occurring. The retention side held up strong. We're not seeing kind of folks that lost their job with the government turning in keys. We're not seeing kind of any of this increase in lease breaks. You're just seeing an overall slowdown in the top of the funnel and this willingness to commit to a lease.”
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#4 - Everyone loves the Bay Area again
After getting beat up for 4+ years, the Bay Area is on fire – and that was the bright spot for every REIT operating there.
EQR noted that, in downtown San Francisco, rents are just now rebounding to 2019 levels while, over the same time period, incomes are up 22%.
“What we're seeing in the Bay Area is really more of a recovery story. We have not begun the growth story yet. And because if you look at the top 20 tech hiring companies, the postings, is still going to add and slightly below the long-term average. And so what we're seeing, that 4% forecasted is a catch-up, if you will. And this market still has a lot of legs.”
Other coastal markets getting shoutouts included New York (the #2 rent growth market for the coastal REITs) and Seattle (though Essex said demand there has softened a bit).
UDR’s Michael Lacy said: “New York has been our strongest market in (the East Coast) region, driven by continued healthy demand and relatively low approximate new supply completions.”
#5 - Sun Belt operators say they see “green shoots” in some high-supplied markets
While record levels of supply continue to put downward pressure on rents across the Sun Belt and Mountain states, several REITs reported “green shoots” in a handful of high-supplied markets.
Among those highlighted (depending who you ask): Atlanta, Dallas, Houston, Tampa, South Florida and Nashville.
MAA said they saw “encouraging progress” in Atlanta and Dallas, while Houston was “steady.”
IRT and NexPoint both highlighted Atlanta as a top market, with IRT shows material gains in both rent and occupancy. IRT also reported progress in Dallas and Nashville. UDR called Tampa was their top Sun Belt market.
Still weak markets included, pretty much universally, Austin and Denver.
“Market dynamics remain competitive, but green shoots are emerging in several of our markets as supply pressures ease.”
“While some markets still have supply issues, particularly in our fast-growing Sun Belt markets, demand is still there. We're absorbing units at a very strong clip right now.”
“We are still seeing recovery. Strong occupancy, solid collections and year-over-year improvements in new, renewal and blended lease rates in the third quarter demonstrate our momentum.”
#6 - Concerns about slowdowns in D.C. and Boston … plus continued softness in L.A.
For much of the past few years, REITs have highlighted D.C. and Boston as top performers. But both saw material cooling in Q3.
In D.C., the reasons for softness are no mystery. While the multifamily industry seemed to weather the DOGE cutbacks pretty well through first half of 2025, the government shutdown has had a much bigger impact on leasing activity and rents. On the upside: Occupancy rates are still mostly healthy.
In Boston, conditions have softened due to pullback in key job sectors and what appears to be a reduction in international students coming to the Boston area’s many universities.
In Boston, “we’ve seen a little bit more softening than you otherwise would have expected” and attributed the slowdown to “weaker biotech sector, pullback in university and research funding.”
“Overall, D.C., we have seen a little bit of a deceleration over the last 60 days or so just in terms of traffic, how that's translated into blends, a little bit more on the concession front, but we're still running about 96.5% occupancy.”
And then there’s Los Angeles, which has been the splinter in the toes of every REIT operating there since 2020. AvalonBay’s Sean Breslin pointed to cutbacks in Hollywood jobs.
Essex’s Angela Kleiman said: “Los Angeles has lagged,” and pointed to higher delinquency, a soft job market and “pockets of supply on the West Side and Downtown L.A.”
#7 - Everyone continues to prioritize occupancy and high retention
It’s been true for a long time now, but every REIT wants to drive revenue and there’s zero revenue from a vacant unit, so occupancy is king. That means giving more on rents in order to compete for an outsized share of the demand.
Earlier this year, most REITs probably thought they’d regain pricing power by now but that hasn’t yet happened. Rents were almost universally softer than expected, and REITs didn’t bend on prioritizing occupancy.
“Our strategy is really an occupancy first, and we'll match the market on rate. But we think that sets us up for the future. If this cautious customer remains, then we've already captured our occupancy and then it's focused on renewals and cash flow growth. And if it ticks up, you're going to see our ability to pivot and price because we're full.”
“We saw increasing occupancy and strong retention and renewal lease rates but experienced continued lack of traction in the ability to push on new lease rates. We believe broad economic uncertainty and slower job growth as evidenced by a downward revision to the job growth numbers contributed to prospects being more cautious about making decisions to move and to operators prioritizing occupancy over new lease rents.”
#8 - Renewal rent growth continues to drive revenue, but could moderate due to gain-to-lease
We’ve seen renewal rent increases top new lease rent increases for nearly three years in many U.S. markets. That has worked so far, in part, because new lease growth exceeded renewal growth by such a wide margin in 2021-2022 – driving up a big cushion in loss-to-lease. But that cushion is gone.
A bunch of REITs noted they’re in a modest gain-to-lease situation right now, which can mean they’re sending out renewal offers that might be ABOVE the new lease rents advertised on their websites. In fairness, a small gain-to-lease isn’t abnormal this time of year, and fewer leases expire in the winter months … plus a 1% gap probably won’t compel renters to move out. But rents today are highly transparent, and if that gap widens, it’ll be tough to push renewal rents at the 3-5% levels we’ve been seeing.
Even if renters can afford it, why would they want to pay meaningfully more than someone coming in the front door?
So it comes down to the spring leasing season. A higher share of leases expire in the spring and summer. So if new lease rents are growing again, renewals can too. If demand is soft and occupancy preservation remains the name of the game, it’ll be tougher to get that new lease rent growth and then likely tougher to retain healthy renewal rent growth.
Already, some REITs have reported softening renewal rent growth in the battle to keep retention and occupancy high.
“Our renewal rate increases of 2.6% came in line with our general expectations as we expected lower renewal increases to support retention and help maintain and grow occupancy.”
#9 - Stock buybacks are all the rage, could result in pullback on acquisitions?
The REITs are betting on themselves, and maybe for good reason. Stock buybacks came up on pretty much every call, and a bunch of the REITs announced fairly significant buybacks.
To be clear: I am not a financial advisor and I’m not giving investment advice here. But it doesn’t take a CFA to understand the REITs’ logic.
For most apartment REITs, their value implied by their stock price equates to a cap rate of somewhere around the low to mid 6% range. And yet if the REITs sold any of their individual apartment properties, most of them will probably trade somewhere between 4.5% and 5.5%. That’s a very big gap. Which means they view their stock are greatly discounted relative to net asset values.
UDR’s CFO Dave Bragg said his company’s round of buybacks were “executed at an average discount to consensus NAV of 20% and an approximate 7% FFO yield.” So that means they’re buying their stock at a discount of 20% versus what they could get investing the same amount of capital in acquisitions of comparable apartment properties.
“We see our company with its high-quality asset base and sophisticated operating platform and forward growth prospects as greatly undervalued versus asset prices in the private market.”
“We clearly recognize the disconnect between where markets are trading and where properties are trading relative to our implied cap rate at our share price. So we have a strong appetite for buybacks.”
“We agree that this is a good use of capital and really sends another signal about where we think the value of the company is and our conviction about what we think it's worth.”
MAA and Essex said they’re considering it. Essex said, “if you look at where we are today, where we're trading today, it's much more compelling from a stock buyback perspective than it was in the third quarter.”
So what the REITs are also hinting it at here, some more plainly than others, is that when there’s such a big discount to their stock versus net asset values, it makes less sense to invest capital in new acquisitions versus buying back stock. So while REITs have been fairly active buyers, and there were a handful more small deals in Q3, they may suddenly be sidelined for a bit – not entirely, but maybe less active than they were, more selective for better value– which is hard to come by.
Because when you're buying a property at a 5% cap rate, you're not getting credit for it by Wall Street. In fact, in Wall Street world, that property is worth less the moment it's acquired by a REIT.
Additionally: When REITs (and every other buyer, for that matter) buy a property, they typically believe they can unlock additional value through better operations of that acquired property. But even for the best operators, it's tough to unlock value to the tune of 20% -- the discount versus stock prices that UDR referenced, for example. Being a long-term owner helps, and is perhaps most accretive longer term, but that bet takes time to pay off.
So this will be an interesting storyline to watch – if we see muted acquisition activity from the REITs until stock values come back more in line with net asset values. And it could also make some (smaller?) REITs more attractive to institutional investors targeting REITs to take private.
#10 - REITs are cautiously optimistic about 2026 as supply drops off
This probably comes as no surprise, of course.
While no one was ready to give 2026 guidance (that typically doesn’t come until after the Q4 calls), they all suggested 2026 could be a better year than 2025 as supply levels come down hard.
The assumption is that the economy is in even somewhat decent shape, that’ll help backfill all those new units built in 2024-25, burn down concessions and get some upward movement on new lease rents again while maintaining solid renewal growth.
EQR’s Mark Parrell said more markets could follow the trajectory of New York and San Francisco, with rebounding rents, as supply drops off. He said: “We believe more markets we operate in will trend in that direction in 2026, assuming the job situation is reasonably constructive.”
“Assuming demand hangs in where it is now, we would expect (rents) to continue to get better and strengthen particularly as we get to the spring and the summer of next year.”
“New supply in our established regions is expected to decline to roughly 80 basis points of existing stock in 2026, which is not only less than half the trailing 10-year average, but also a level we haven't experienced since 2012.”
“While supply pressures are receding, it's too early to call a broad market recovery, but we are cautiously optimistic that 2026 will be a better operating environment than 2025.”
“Market fundamentals are coalescing to support a more bullish outlook for multifamily. We expect the rental market will take the lion's share of new household formation and outperform the for-sale market on the near term.”
Michael Manelis added: “In many of these markets, it's going to be when does that consumer sentiment turn positive again. We have such a great setup with the reduction of competitive supply being so much lower in many of these markets. It's not going to take much of a catalyst from that sentiment change or any kind of catalyst in the job growth in these markets to really fuel that intra-period growth.”
And I agree consumer sentiment is a real key. If consumers feel more confident, and that’d likely correspond with a solid employment picture, then the demand and rent story looks very favorable. But that’s a big “if,” of course.
— Now Spinning on The Rent Roll Podcast —
The Rent Roll with Jay Parsons podcast continues to frequently rank in the Top 100 podcasts on Apple’s charts for investing-themed podcasts. Thank you for helping us grow so quickly. New episodes are released every Thursday morning (though we did take a vacation last week – our first off week since Christmas. Back at it this week!).
Episode 58: 5 Takeaways from the Apartment REITs’ Q3’25 Earnings Calls with Mizuho’s Haendel St. Juste.
Episode 57: Is It Time to Worry? Plus a Conversation with Middleburg CEO Chris Finlay
Episode 56: Budgeting Season: Tips for 2026 with Gables Residential’s Sue Ansel
Episode 55: Q4’25 Apartment Market Update & Outlook with Kettler’s Alyson Bode
Episode 54: Is Now the Time to Build Again? with JPI’s Payton Mayes, Mollie Fadule and Kyley Harvey.
Episode 53: The Case for Family-Friendly Class A Apartments with Bobby Fijan
Episode 52: Q3’25 SFR Update & Outlook with Invitation Homes’ Scott Eisen
