Amid the recent distress in the residential real estate investment trust (REIT) market, AvalonBay Communities, Inc. (AVB Quick QuoteAVB - Free Report) revealed that it expects its second-quarter rental revenue for established communities to grow at a pace that is consistent with its earlier projections.

Specifically, for established communities, total rental revenue for the second quarter is expected to increase 4.9–5.1% over the prior-year period, the company said.

Notably, residential REIT stocks saw a sell-off over the past few days following a guidance cut for 2016 same store revenue by Equity Residential (EQR Quick QuoteEQR - Free Report) on Jun 1, owing to continued weakness in New York and the recent downturn in the San Francisco portfolio.

Equity Residential, which blamed new rental apartment supply for hurting rent growth, now expects second-quarter 2016 same store revenue growth of around 4.0–4.2%. Though occupancies and renewal rates in these markets are in line with the company’s projections, new lease rates are falling short.

As a matter of fact, significant rent growth in the past made New York and San Francisco markets among the preferred ones for developers and landlords. So, new construction activity recently surged in these markets. But elevated supply of new units curtailed landlords’ capability to demand more rents.

Shares of Equity Residential fell 8.1% since closing on May 31. Also, stocks of Avalonbay, Essex Property Trust Inc. (ESS Quick QuoteESS - Free Report) and UDR Inc. (UDR Quick QuoteUDR - Free Report) fell 5.4%, 7.6% and 7.2%, respectively, over the same time frame.

Currently, Avalonbay has a Zacks Rank #3 (Hold). Equity Residential, Essex Property and UDR also share the same rank as Avalonbay.

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