Multifamily REITs Cautiously Optimistic in 4th Quarter 2025

Earnings commentary from the largest publicly traded multifamily REITs in 4th quarter 2025 highlighted a sector that is finally moving past peak supply pressure. With resident retention at historic highs, absorption improving and development pipelines being strategically repositioned, management teams are broadly optimistic about a more constructive 2026, especially in the back half of the year.

Mid-America Apartment Communities (MAA)

MAA emphasized high resident retention and improving fundamentals despite lingering supply pressures in select Sun Belt metros. Management highlighted that elevated concessions and longer lease-up times continue to delay full earnings contributions by roughly one year. The company guided to a 2026 core FFO midpoint of $8.53 per share and expanded its development pipeline to $932 million, positioning for improved yields as supply moderates. Risks include regulatory impacts in Colorado and California, as well as phaseouts in tax abatements.

AvalonBay Communities (AVB)

AVB reported a record-low turnover rate of 41%, driven by strong resident satisfaction and fewer new alternatives due to declining starts. Management sees improving fundamentals ahead, with the second half of 2026 revenue growth expected to surpass the first half of 2026 thanks to better job growth, softer comps and lower supply. AVB is also finding high-yield development opportunities, primarily in established East Coast markets, where supply barriers protect long-term returns.

Equity Residential (EQR)

EQR leadership noted that while 2025 was challenging overall, San Francisco and New York outperformed and are expected to remain strong in 2026. High occupancy and strong renewals continue to anchor performance, even as coastal rent trends diverge. Management expects 2026 stabilization led by its core coastal‑urban markets, though non-core markets may face softer demand.

Essex Property Trust (ESS)

ESS highlighted improving occupancy (96.3%) and minimal concessions, supported by tech-sector stabilization and limited new supply. Management forecasts a roughly 20% decline in new supply in 2026, with Northern California expected to lead performance followed by Seattle and Southern California. Job postings at major tech companies rising above pre‑COVID levels support the demand outlook, though market-level job growth remains moderate.

Camden Property Trust (CPT)

CPT emphasized new supply has peaked and absorption is at two‑decade highs. The company is selling 11 California communities valued between $1.5 and $2 billion and is reinvesting roughly 60% of proceeds via 1031 exchanges into high-growth Sun Belt markets. Management believes a “pivot point” is forming for the Sun Belt and is repositioning ahead of that shift. Risks include Colorado HB 25‑1090, which is expected to reduce same-store NOI by about 19 basis points (bps).

Conclusion: 2026 Set for a Gradual Improvement

Across MAA, AVB, EQR, ESS and CPT, the message is clear: supply has peaked, retention is historically strong, and absorption is improving. While regulatory risks and market-specific demand uncertainties persist, fundamentals are expected to strengthen meaningfully throughout the second half of 2026. Operators with strong renewal capture, selective development pipelines and efficient capital recycling should remain best positioned for outperformance.