Apartment Market Faces Increased Competition and Rising Rent Concessions
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 17 2026
0mins
Source: CNBC
- Increase in Rent Concessions: According to RealPage Market Analytics, 16.6% of stabilized apartments offered concessions in January 2023, marking a 1 percentage point increase from December, indicating heightened competition in the market.
- Average Discount Insights: The average rent discount in January was 10.7%, equivalent to about five weeks of free rent, which, while consistent with Q4 2025 averages, is slightly higher than October's figures, reflecting ongoing tenant demand for concessions.
- Rising Vacancy Rates: The national vacancy rate hit a new peak of 7.4%, and although rents saw a slight increase of 0.2% in February, they are down 1.5% year-over-year, suggesting that the market still faces structural challenges, particularly due to oversupply of new apartments.
- Supply-Demand Imbalance: With approximately 1.4 million new apartment units entering the market over the past two years, tenant expectations for concessions have risen, and while absorption rates are better than in 2010, the high supply remains a significant hurdle.
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Analyst Views on AVB
Wall Street analysts forecast AVB stock price to rise
16 Analyst Rating
6 Buy
10 Hold
0 Sell
Moderate Buy
Current: 186.590
Low
176.90
Averages
200.71
High
222.50
Current: 186.590
Low
176.90
Averages
200.71
High
222.50
About AVB
AvalonBay Communities, Inc. is a real estate investment trust (REIT). The Company develops, redevelops, acquires and manages apartment communities in metropolitan areas in New England, the New York/New Jersey Metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California, as well as in the Company's expansion regions of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado. The Company focuses on metropolitan areas in these regions. The Company's segments include Same Store, Other Stabilized and Development/Redevelopment. The Company owns or holds a direct or indirect ownership interest in operating apartment communities containing apartment homes in 11 states and the District of Columbia. The Company operates under four core brands, which include Avalon, AVA, eaves by Avalon, and Kanso. Its core Avalon brand focuses on upscale apartment living and high-end amenities and services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Competing Bid Restrictions: The agreement imposes significant penalties on AvalonBay for accepting competing bids, potentially limiting shareholder options and future gains, highlighting concerns regarding the board's fulfillment of fiduciary duties.
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- Shareholder Eligibility: The dividend will benefit all common stockholders as of June 30, indicating the company's commitment to its shareholders and its ongoing profitability, which enhances investor confidence.
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- Asset Scale: As of March 31, 2026, the company owned or had interests in 319 apartment communities with 98,271 apartment homes across 11 states and Washington D.C., with 25 communities under development, indicating a proactive approach to market expansion and asset portfolio enhancement.
See More
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- Merger Scale and Impact: The all-stock deal valued at $69 billion will create a company with over 180,000 rental apartments, expected to close in the second half of 2026, marking a significant advancement in industry consolidation.
- Key Appointments: The executive team under Schall includes COO Michael Manelis and CFO Kevin O'Shea, among others, which will help ensure operational stability and growth potential for the combined company post-merger.
- Dual Headquarters Strategy: The merged entity will have dual headquarters in Arlington, Virginia, and Chicago, with a new name to be announced at closing, a strategic move aimed at enhancing market presence and brand recognition.
See More
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See More
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- LiveRamp Acquisition Review: LiveRamp is to be acquired by Publicis Groupe for $38.50 per share, totaling an enterprise value of $2.167 billion, with investigations questioning if the board fulfilled fiduciary duties to ensure a fair transaction for shareholders.
See More
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