June 7, 2016
Ramped-up apartment supply in San Francisco and New York are hurting multifamily REIT revenues. Specifically, Essex Property Trust revenue dropped 3.7%. AvalonBay Communities Inc. and UDR Inc., which operates in both cities, dropped 1.9% and 2.8%, respectively.
Equity Residential, the largest apartment REIT by market value, lowered its revenue forecast for the second time in 2016. The REIT blamed continued weakness in New York and technology slowdown in San Francisco.
San Francisco and New York have received a lot of supply in recent years. In the City by the Bay, 5,100 new units — the most in 26 years — are expected to be listed for rent in 2016, according to Reis Inc. Meanwhile, according to brokerage Citi Habitats, 5,675 apartments will be added to the rental inventory in Manhattan.