Renewals Carry Apartment REIT Pricing as Coastal and Sun Belt Results Split

Renewals and low turnover continued to support apartment REIT pricing in 3rd quarter 2026, while new lease performance remained pressured across much of the Sun Belt.

Results from Camden Property Trust, Essex Property Trust, Mid-America Apartment Communities (MAA), UDR and Vivmark Residential highlighted a sharp divide between coastal and Sun Belt markets, as coastal-heavy operators raised guidance and Sun Belt-focused peers lowered expectations.

A merger and major portfolio shifts reshaped the group

Vivmark Residential reported its first quarterly results since AvalonBay Communities and Equity Residential completed their merger on Aug. 17, creating a same-store portfolio of 157,377 apartment homes. The company raised its target for yearly cost savings and revenue gains from the combination by $10 million to $135 million. COO Michael Manelis said years of separate operations gave Vivmark “a multi-year A/B test,” letting it compare the two companies’ practices and keep what works best.

Other operators also changed their portfolio exposure. Camden completed the roughly $1.6 billion sale of 11 California communities on July 29, and UDR formed a $2 billion partnership with Apollo, covering 19 communities. As a result, three of the five REITs now operate meaningfully different portfolios than a year ago.

Renewals continued to carry lease pricing

Renewals remained the primary source of pricing strength. Renewal lease rates rose 5.3% at Essex, MAA and Vivmark and 3.6% at Camden, while retention remained elevated across portfolios. UDR reported a record-high 3rd quarter retention rate of 52%, and MAA recorded a record-low share (10.1%) of move-outs to homeownership.

Management tied that stability largely to housing costs. “We see sustained high homeownership costs, and we see residents continuing to stay in place, both for cyclical and structural reasons,” UDR CFO Dave Bragg said. MAA added that the dollar gap between new and renewal rents has held at about $190 to $200 for four quarters, a small difference next to the cost and hassle of moving.

New lease pricing stayed negative as concessions persisted

New lease pricing told a different story. New lease rates declined at four of the five REITs, ranging from -6.0% at MAA to -0.2% at Essex. Vivmark was the only exception, with new lease rates up 0.4%.

Camden and MAA attributed the weakness largely to lease-up discounting and lease mix. “Concessions have remained remarkably sticky, seemingly led by many merchant builders now turned reluctant operators,” Camden CEO Alex Jessett said. MAA said its year-to-date new lease decline narrows to -1.9% when the departing resident stayed only one lease term, a figure it views as a better gauge of market rents.

Northern California and Denver marked the extremes

Regional performance diverged sharply. Northern California led results at both Vivmark and Essex, where same-store NOI rose 11.2% and 7.0%, respectively. At UDR, new lease rates rose 5.7% in the West region but fell 7.2% in the Southwest region. Denver sat at the other end, with same-store NOI down 9.6% at Vivmark and nearly 7% at both Camden and MAA.

Essex linked Northern California’s strength to limited supply and rents that remain below historical norms relative to incomes. By its estimate, rents could rise more than 20%, assuming no wage growth, before rent-to-income ratios returned to pre-COVID levels. Meanwhile, Camden tied most of its Denver revenue decline to local legislation that stopped it from billing residents for common-area utilities, on top of persistent concessions.

Guidance split along portfolio lines

Full-year outlooks followed the same divide. Essex, UDR and Vivmark raised same-store revenue guidance, while Camden and MAA lowered theirs. Both Sun Belt-focused REITs cited timing: MAA said new lease pricing is recovering later than expected, and Camden said September was softer than expected. Both still pointed to early improvement as supply eases. “October new resident lease pricing improved from September, counter to the normal seasonal pattern,” MAA CEO Brad Hill said.

What to watch in 4th quarter

The key question for 4th quarter is whether easing supply translates into firmer revenue growth in Sun Belt markets. With completions declining and demand holding up, those results should show whether supply-heavy markets are beginning to close the gap with coastal markets.