The Rent Roll with Jay Parsons

Episode 58: Haendel St. Juste | 5 Takeaways From Q3 '25 Apartment REIT Calls
Release Date: November 6, 2025
Guest: Haendel St. Juste (Managing Director & Senior REIT Analyst, Mizuho Americas)

Episode Overview

This episode covers Jay Parsons' top five takeaways from the Q3 2025 Apartment REIT earnings calls and features a deep-dive interview with Haendel St. Juste, an industry veteran analyst. The conversation revolves around the current health of the apartment sector, divergent trends between coastal and Sun Belt markets, operational strategies, investor sentiment, and what to expect for 2026. The tone is candid, analytical, and sprinkled with industry realism.

Top Five Takeaways from Q3 '25 Apartment REIT Calls

1. Renter Financial Health Remains Strong—But Commitment Phobia Grows

(07:15 – 16:00)

• Key Points:
  • Despite macro jitters—job cuts, rumored economic slowdowns—renter health appears stable.
  • Rent-to-income ratios are "healthy low" (sub-20%); incomes of new residents are up year-over-year.
  • No uptick in delinquencies, move-outs, or lease breaks reported.
  • CEOs quoted include Mark Parrell (Equity Residential), Brad Hill (MAA), and Sean Breslin (AvalonBay), all noting strong wage growth and stable resident employment.
• Notable Quotes:
  • “We see our existing residents as having a generally stable employment situation and good wage growth… continued improvements in delinquency and no sign of customer financial stress.” – Mark Parrell, Equity Residential (08:50)
  • “That’s driving favorable rent to income ratios, which remain [a] healthy low of 20%.” – Brad Hill, MAA (09:50)
• However:
  • Prospective renters are increasingly “commitment-phobic,” showing caution and indecision in new leasing, especially in markets affected by government shutdowns and layoffs (Washington D.C.).
  • Operators are “giving on rent” to protect occupancy as urgency drops among new renters.
  • “There was just a little less sense of urgency to buy and sign on the dotted line and commit to move-in dates.” – Michael Manelis, EQR (13:20)

2. Q3 Leasing Season Ended Early, Softening Rents/Occupancy

(16:00 – 25:00)

• Key Points:
  • REITs observed an early-than-usual seasonal drop in leasing activity, leading to softer rents and more concessions.
  • "Economic occupancy… fell below… outlook in September and continued to be below for October." – Sean Breslin, AvalonBay (17:40)
  • Retention rates remain high, but new lease rent growth is decelerating more than is typical seasonally.
• Market Nuance:
  • Some REITs (like IRT) argue the leasing season started early, so demand may have simply shifted.
  • Sun Belt specialist MAA reports “pretty typical seasonality,” with some signs of less negative new lease declines vs. last year.
  • “Demand is still there. We’re absorbing units at a very strong clip right now.” – Matt McGregor, NexPoint (22:20)
• The Takeaway:
  • The timing of demand might have shifted forward rather than outright dropped, and regional variation is significant.

3. Coastal vs. Sun Belt: The Divide Grows More Complicated

(25:00 – 36:00)

• Key Points:

  • The once-clear-cut “coast vs. Sun Belt” storyline is blurring due to divergent trends within (and across) both regions.

  • Coastal Recovery:

    • San Francisco Bay Area surges back from pandemic lows—now a recovery (not growth) story.
      • “The recovery in San Francisco, particularly downtown, is real.” – EQR (27:30)
      • “Still getting back to pre-COVID levels...market still has a lot of legs.” – Angela Kleeman, Essex (28:00)
    • New York showing sustained demand and minimal new supply; little impact from local rent-freeze proposals on REIT portfolios.

  • Coastal Soft Spots:

    • Short-term weakness seen in Washington D.C. (“taking it on the chin”), Boston (biotech sector, university research funding, fewer international students), and Seattle (post-Amazon layoffs).
    • L.A. remains a challenge. Boston and Seattle joining the “cautious” list.
      • “Boston… attributed the slowdown to weaker biotech sector pullback in university and research funding.” – EQR (31:11)

  • Sun Belt:

    • Continues to face high supply pressure, causing rent cuts—especially in Denver, Austin, Nashville.
    • Lease-up times for new properties are extended, creating persistent downward pressure.
    • “It’s not a 12-month lease-up… just taking longer to reach stabilized occupancy.” – Jay Parsons (34:30)
    • Green Shoots: MAA and others citing stabilization and “concession burn-off” in Houston, Dallas, Atlanta, Tampa—particularly in urban cores and smaller secondary markets.
      • “Dallas and Atlanta are certainly the standouts and Houston continued to be steady.” – Tim Argo, MAA (35:30)

4. REITs Are Buying Back Stock Rather Than Acquiring More Assets—for Now

(36:00 – 39:40)

• Key Points:
  • Stock buybacks were a major theme in Q3, as REITs view their own shares as heavily discounted vs. asset values.
  • "We see our company… as greatly undervalued versus asset prices in the private market.” – Mark Parrell, EQR (37:15)
  • Typical REIT implied cap rates (via stock price) are in the low/mid 6% range, while property sales are closer to high 4%-5.5%.
  • Buying back shares is viewed as a superior use of cash compared to purchasing assets at tighter yields.
  • AvalonBay repurchased $150M of stock; EQR, $100M; IRT, UDR, Essex considering or participating as well.
  • Acquisitions are expected to slow as stock buybacks remain more accretive.

5. Cautious Optimism for 2026 as Supply Pipeline Shrinks

(39:40 – 47:30)

• Key Points:
  • Nobody provided official 2026 guidance, but sentiment is that supply, not demand, has been the bigger drag—soon to recede dramatically.
  • “New supply in our established regions is expected to decline…a level we’ve not experienced since 2012.” – Sean Breslin, AvalonBay (40:15)
  • Most REITs forecast improvement—potential for rent rebounds as new supply wanes (especially if job growth holds up).
  • Optimism is “cautious” and hinges on economic stability and—most critically—consumer sentiment.
    • “It won’t take much for demand/rents to pick up if sentiment and employment improve.” – Michael Manelis, EQR (42:50)
  • Market consensus expects renewed rent growth in 2026 and improved bottom-line revenue by 2027.

Interview Highlights: Haendel St. Juste, Mizuho

(36:44 – 75:15)

Haendel’s Background & Perspective

• 20+ years as a REIT analyst, including on-the-ground experience through multiple cycles.
• REIT research wasn’t a direct path but became a rewarding, relationship-driven career.

Behind the Scenes: Earnings Call Madness

• Calls are tightly clustered—sometimes on purpose—to manage message and, perhaps, shield less positive news.
  • “Maybe this is their way of paying us back…” – Haendel (39:03)

Key Discussion Points

1. Recent Trends & Q3 Themes:

   • No huge surprises: softness was anticipated given slower job growth and consumer confidence slide.
   • The Sun Belt is still the region of most concern (due to supply), but demand-side worries are growing for 2026.
   • Haendel’s warning: “the bigger concern that I have is our numbers for next year are too high. And in a lot of cases, I’m fairly high conviction that they are.” (44:25)

2. Rents: Renewal vs. New Lease Spread & Risks

   • Large spreads (renewals up, new leases flat/down) are not sustainable forever.
   • On renewal concessions: “That is something we are watching. Doesn’t seem to be prevalent, but…a little surprising.” (47:10)

3. Operational Strategies & Tech

   • Most REITs improving efficiency via staff consolidation, self-guided tours, smart home, and AI-driven leasing.
   • UDR gets specific kudos for quantifying tech savings; others, like AvalonBay, do the same but talk less.
   • “Just because I didn’t tell you I took a shower this morning, doesn’t mean I didn’t take a shower this morning.” (old AvalonBay CFO joke) (50:15)

4. 2026 Outlook: Guideposts & Market Focus

   • Management teams not offering formal numbers but signaling:
     • SFR should have the strongest starting point (renewals), then coastals, then Sun Belt.
     • Sun Belt’s “second derivative” (rate of change) is improving, especially in places like Atlanta and Orlando.
     • Coastal markets (except San Francisco) face mounting headwinds (D.C., Boston, L.A., Seattle now among worries).

5. Short vs. Long-Term Outlook (Sun Belt Focus)

   • Short term: Sun Belt looks weak, so investors stay cautious.
   • Long term: “If I’m buying stocks over the 12, 18 month time period…Sunbelt in the mid-six cap rates, private market values at 5ish, that’s a sizable delta.” (57:50)
   • Longer-term investors look for supply to fall and “above average growth” returning post-2026.

6. Defensive Profile of Apartments/SFR

   • SFR seen as “stickier” due to family orientation; apartments more exposed to short-term job loss due to younger/less established residents.

7. NAV vs. Stock Market Value: The Gap

   • REIT stocks trade at a meaningful discount to net asset value and private-market transactions.
   • Implied cap rates: REITs in mid-sixes; market sales at high fours/low fives.
   • Stock buybacks seen as logical (and increasingly used) reaction—“signal” matters, but so does buyback size.

8. Take-Privates and M&A?

   • Smaller REITs could see more take-private deals; the setup (cheaper debt, Sun Belt’s long-term appeal) supports this, but opportunities fewer than in past cycles.

Memorable Quotes

• “The days are long, the years go by fast, but it’s been a very rewarding journey.” – Haendel St. Juste describing his REIT career (37:00)
• “If you’re going to tell me how cheap the stock is… why aren’t you buying it?” – Haendel on the importance of meaningful stock buybacks (71:20)

Notable Data Points & Timestamps

| Segment | Timestamp | |-------------------------------------|------------| | Renter Financial Health & Commitment| 07:15–16:00| | Leasing Seasonality & Rents | 16:00–25:00| | Coastal vs Sun Belt Details | 25:00–36:00| | Stock Buybacks Theme | 36:00–39:40| | 2026 Outlook/Optimism | 39:40–47:30| | Haendel St. Juste Interview | 36:44–75:15|

Conclusions & Looking Forward

• Apartment REITs remain “healthy but cautious”—solid resident finances but facing leasing hesitancy and softening new demand.
• 2026 is viewed optimistically, largely because the supply influx is predicted to recede. Much depends on economic and job growth stability.
• Regional variation is increasing: strong rebounds in San Francisco/New York, new cracks in Boston/D.C./Seattle, and tentative green shoots in the Sun Belt.
• The gap between public (cheap) and private (pricey) valuations is driving stock buybacks and could catalyze more M&A or take-private activity, especially among smaller REITs.
• Investors and analysts watch for meaningful catalysts before diving in, given muted near-term fundamentals but more compelling long-term stories for select markets and operators.

Listen Next

• Next week: Deep-dive into Single Family Rental REITs (AMH and Invitation Homes) plus Camden Property Trust’s delayed earnings.
• Recommended: Past episodes featuring Rick Campo (longest-tenured multifamily REIT CEO) and Joanna Zabrinsky on rent pricing/all-in pricing.

For more industry analysis and interviews, tune in next week on The Rent Roll!